Full Breakdown
Decline in U.S. Solar Installations Amid Policy Shifts
3/10/2026, 8:38:48 PM
Overview of the Solar Market in 2025
The U.S. solar market experienced a significant decline in installations in 2025, with a 14% decrease from the previous year, according to a report by the Solar Energy Industries Association (SEIA) and Wood Mackenzie. The total installed capacity reached 43.2 gigawatts direct current (GWdc), down from over 49 GWdc in 2024. This downturn is attributed to various factors, including policy changes under the Trump administration, which prioritized fossil fuel exports and enacted the One Big Beautiful Bill Act (OBBBA), leading to a phase-out of subsidies for renewable energy.
Impact of the One Big Beautiful Bill Act
The OBBBA has been identified as a pivotal factor in the decline of solar installations. The act imposed stricter timelines for tax credits, requiring solar projects to begin construction by July 4, 2026, to qualify for the Investment Tax Credit (ITC) or Production Tax Credit (PTC). This shift has led to delays in project timelines, with developers focusing on securing their pipelines rather than commencing new projects. The utility-scale solar segment saw a 16% decrease in installations, while community solar projects fell by 25%.
Regional Insights and Future Projections
Despite the overall decline, solar installations remained the leading source of new electricity-generating capacity in the U.S., accounting for 54% of all new additions in 2025. Notably, over two-thirds of the new solar capacity was installed in states won by Trump in the 2024 election, including Texas, Indiana, Florida, Arizona, Ohio, Utah, and Arkansas. Texas alone contributed 11 GW of new solar capacity. Looking ahead, the SEIA projects that the U.S. could add approximately 490 GW of new solar capacity by 2036, bringing the cumulative total to nearly 770 GW.
Criticism and Concerns
Critics of the Trump administration's energy policies argue that the lack of policy certainty is detrimental to the solar market. Darren Van’t Hof, interim President and CEO of SEIA, emphasized the need for stable policies to ensure continued growth in solar installations. He stated, “Without this certainty, less solar will get built and Americans will pay the price with higher energy bills.” The report highlights that while solar remains economically competitive, uncertainties related to tariffs and permitting processes complicate the outlook for future growth.
Official Statements
The SEIA report underscores the resilience of the solar industry, noting that solar and storage accounted for 79% of new capacity additions in 2025. Michelle Davis, head of solar at Wood Mackenzie, remarked, “It’s clear that solar will continue to be the dominant source of new power capacity in the United States, even as gas generation continues to grow.” This sentiment reflects the ongoing demand for solar energy, despite the regulatory challenges faced by the sector.
Conclusion
The decline in solar installations in 2025 marks a significant shift in the U.S. energy landscape, driven by policy changes under the Trump administration. While solar continues to lead in new capacity additions, the industry's future growth hinges on the establishment of stable and supportive policies. The ongoing demand for solar energy suggests that, despite current challenges, the sector has the potential for recovery and expansion in the coming years.
