US Solar Posts Record Growth in H1 2025 Even as Policy Clouds Loom

The US solar industry added nearly 18 GW of new capacity in the first half of 2025, with solar and storage accounting for 82 percent of all new power brought online, according to the latest US Solar Market Insight Q3 2025 report by Solar Energy Industry Association (SEIA) and Wood Mackenzie. 

However, policy headwinds from the Trump administration, including the One Big Beautiful Bill Act (HR1) and recent executive actions, have led to sharply reduced deployment forecasts. This policy reversal is also resulting in rising uncertainty across the solar sector.

Policy Headwinds Threaten Solar Growth

Key provisions in HR1 and other recent federal actions have triggered the most significant downturn in US solar outlooks since the boom of recent years, warn industry analysts. 

The low-case scenario in the latest SEIA/Wood Mackenzie report predicts the United States could lose 44 GW of new solar deployment by 2030, an 18 percent decline from current forecasts. Compared to pre-HR1 projections, the deployment shortfall could reach 55 GW or 21 percent by the end of the decade.

Interestingly, one of the report highlights is that 77 percent of solar capacity installed so far in 2025 occurred in states carried by President Trump in the last election. These include Texas, Indiana, Arizona, Florida, Ohio, Missouri, Kentucky, and Arkansas, all among the top 10 for new projects. 

SEIA President Abigail Ross Hopper emphasised, “Solar and storage are the backbone of America’s energy future, supplying the majority of new power at the lowest cost. Federal policy changes are stifling investment, raising energy costs, and putting grid reliability at risk. Yet demand for reliable, affordable energy continues to drive industry growth.”

Manufacturing and Market Momentum at Risk

The US added 13 GW of new solar module manufacturing capacity in the first half of 2025, bringing the national total to 55 GW. But no new upstream manufacturing investments were made in Q2. This is because the manufacturers and investors awaited clarity on federal policies, with billions in private capital said to be at risk of stalling. 

Analysts also note that while near-term deployments are supported by projects already in motion and a rush to beat tax credit deadlines, long-term prospects are shadowed by permitting slowdowns and regulatory changes that threaten major new projects, especially in Arizona, California, and Nevada.

Policy Changes Affecting Future Growth

The solar industry is navigating significant federal policy shifts, notably the OBBBA’s phaseout of key tax credits for solar and residential systems after 2027 and 2025, respectively. 

Additionally, new permitting requirements from the Department of the Interior and altered Treasury definitions on tax credit eligibility have introduced further uncertainty. 

These factors are integrated into SEIA’s base and low-case forecasts projecting 246 GWdc and 202 GWdc of solar deployment, respectively, from 2025 to 2030, reflecting decreases of 4 percent and 18 percent compared to pre-OBBBA expectations. This raises serious concerns regarding the energy future of one of the top energy-consuming countries in the world.

Industry Alarm

SEIA and Wood Mackenzie caution that if current trends persist, US grid reliability and economic competitiveness could suffer, and the administration’s ambitions in emerging technologies like AI may falter. 

Industry leaders have called on Congress and the administration to reverse new executive actions, warning of higher electricity prices, lost jobs, and diminished investment in America’s growing clean energy sector.