The US solar industry navigated unprecedented change in 2025

The US solar industry installed 43.2 gigawatts-direct current (GWdc) of capacity in 2025, a 14% decline from 2024 and the second largest annual capacity decline in the industry’s history. Throughout 2025, the industry navigated unprecedented change, ranging from numerous trade actions to the reversal of renewable energy tax credit policy.  

The One Big Beautiful Bill Act (OBBBA) altered the trajectory of the US solar industry in 2025. In our US solar market insight 2025 Year in review report, created in collaboration with the Solar Energy Industries Association (SEIA), we dive into the impacts from the bill thus far and how the industry is navigating the change. In addition to our base case, we forecast a high and low case scenario in this report to address the critical policy and market uncertainties still facing the industry. 

Purchase the full report here, fill out the form on this page to download the executive summary, or read on for some key highlights. 

Like the Inflation Reduction Act in 2022, the OBBBA altered the trajectory of the US solar industry in 2025 

When President Trump signed the OBBBA into law on July 4, 2025, the solar industry experienced another significant policy shift, akin to that of the Inflation Reduction Act in 2022. The legislation accelerated the phaseout of multiple tax credits for solar projects, changing project economics and development schedules across all sectors. 

For the residential segment, the year-end expiration of the Section 25D tax credit for customer-owned solar caused a surge in sales and permitting activity. However, by mid-year, it was clear that equipment delivery delays and timing constraints would hamper this surge. Six months simply wasn’t much time for installers to make more sales, order more equipment, and fully complete installations. We accurately predicted that annual installations would be roughly in line with 2024. 

For the commercial, community, and utility-scale sectors, passage of the OBBBA prompted developers to reexamine their pipelines. Developers with projects already positioned to meet construction-start requirements by the deadlines accelerated their timelines. (These deadlines were year-end 2025, before foreign entity of concern [FEOC] requirements, or July 2026 with FEOC requirements). This drove a surge in equipment procurement in the second half of 2025. Projects in earlier development stages faced difficult choices. Developers had to decide whether to push forward under tighter timelines or risk losing tax credit eligibility entirely.  

Commercial solar grew 6% year-over-year as California’s pipeline of legacy net metering projects (NEM 2.0) continued to come online in 2025. Meanwhile, community solar declined by 25% compared to 2024. This decline was anticipated even before the major tax credit changes in OBBBA were passed – volumes in Maine and New York shrank as pipelines in these markets were built out with little to no planned new development.  

Utility-scale solar installations declined by 16% in 2025. Uncertainties related to permitting and tax credit qualification caused delays for many projects. In the second half of the year, developers focused on safe harboring as much of their pipelines as possible. Therefore, there was less urgency to bring late-stage projects online by year end. This weakened fourth quarter deployment but created a more robust near-term pipeline for 2026 and 2027. 

Our high and low cases explore outcomes for further FEOC clarity, safe harboring, tariffs, permitting, and more 

In this year’s alternative scenarios for the US solar industry, we address the most pertinent policy and market uncertainties facing the industry. They include, but are not limited to: FEOC Treasury guidance, safe harbor capacity, tariffs, federal permitting, and power demand growth. While the recent February Treasury guidance on FEOC requirements provided some clarity, critical uncertainties remain for the industry. 

For this year’s scenarios, we assumed that renewable energy tax credits and the associated qualification timelines remain unchanged from the OBBBA. We also assumed that tax equity availability to monetize those tax credits was sufficient across our three scenarios. This year, other market and policy factors, particularly the ones listed above, are more top of mind for the industry. More details on our assumptions with segment-level detail can be found in the full report. 

Overall, our high case results in 56 GWdc of solar installations (or 11%) above our base case between 2026 and 2036. And our low case results in 55 GWdc of solar installations (also 11%) below our base case between 2026 and 2036. 

US solar fleet will nearly triple over the next decade 

In our base case outlook, the US will install 490 GWdc of capacity over the next 10 years to reach a total of 769 GWdc. This is similar to our past outlooks, in which solar capacity nearly triples over the decade. It’s clear that solar will continue to be the dominant source of new power capacity in the United States, even as gas generation (from both new and existing sources) continues to grow. Strong demand growth, combined with escalating costs of new gas plants, will allow solar to remain competitive, even without tax credits. 

Learn more 

The full report explores each segment in detail and delves into the assumptions used for each forecast scenario. Fill in the form on this page for a complimentary copy of the 16-page executive summary.