While solar capacity additions remained the top U.S. source of new power for the fifth consecutive year in 2025, installations slumped by 14% last year, as the Trump Administration’s assault on clean energy restricted tax credit timelines while tariffs and permitting uncertainty added to investor concerns.
The U.S. installed 43.2 gigawatts direct current (GWdc) of solar power capacity in 2025, down by 14% from 2024, a new report by the Solar Energy Industries Association (SEIA) and Wood Mackenzie showed on Tuesday.
The utility-scale segment installed 34.7 GWdc in 2025, down by 16% from a year earlier as substantially fewer projects that were originally slated to come online in the fourth quarter actually started up. The utility-scale sector shrank by nearly 40% quarter-over-quarter in the fourth quarter.
“Due to the changes in tax credit deadlines, developers delayed commercial operation dates and focused on safe harboring their pipeline,” the report said.
Under the Trump Administration’s One Big Beautiful Bill Act (OBBBA), wind and solar projects must begin construction no later than July 4, 2026, to qualify for Investment Tax Credit (ITC) or Production Tax Credit (PTC). Projects that miss this deadline must be fully placed in service by December 31, 2027, to remain eligible for tax credits.
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Despite the lower capacity additions, solar accounted for 54% of all new electricity-generating capacity added to the U.S. grid in 2025. Combined with storage, solar and storage accounted for 79% of new capacity last year.
The report also found that over two-thirds of all solar capacity installed in 2025 was built in states won by President Trump—Texas, Indiana, Florida, Arizona, Ohio, Utah, and Arkansas rank among the top 10 states for solar additions in 2025.
Going forward, solar has the foundations to keep growing at a steady pace, but the many uncertainties thrown by the Trump Administration – including permitting and tariffs – complicates the outlook, according to SEIA and Wood Mackenzie.
“Washington must deliver policy certainty for the market to work and to keep pace with growing energy demands,” said Darren Van’t Hof, Interim President and CEO of the Solar Energy Industries Association.
“Without this certainty, less solar will get built and Americans will pay the price with higher energy bills.”
By Tsvetana Paraskova for Oilprice.com
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