BY COMFORT OGBONNA
The growth of the U.S. solar energy market slowed in 2025 as new installations declined compared with the previous year, highlighting a cooling momentum in the sector following major policy changes under President Donald Trump. The slowdown comes after the administration removed several subsidies and tax incentives that had previously supported renewable energy development.
According to a new study released by the Solar Energy Industries Association and Wood Mackenzie, the United States added about 43 gigawatts of new solar capacity in 2025. This represents a notable decline from nearly 50 gigawatts installed in 2024, reflecting the growing challenges facing renewable energy developers.
The report indicates that recent policy changes under the administration’s One Big Beautiful Bill Act have disrupted the solar industry, particularly in large-scale projects. Utility-scale solar installations dropped by 16% in 2025, while community solar projects saw an even steeper decline of 25%.
The slowdown comes as the renewable energy sector faces multiple pressures, including rising tariffs and a pause on approvals for several large solar projects. These developments reflect a broader shift in the government’s energy strategy, which is increasingly focused on expanding oil, natural gas, coal, and nuclear energy production.
This policy direction marks a clear departure from the renewable-focused approach pursued during the administration of Joe Biden, which had prioritized aggressive investments in clean energy and climate initiatives.
Despite the slowdown, solar energy continued to play a major role in new electricity generation capacity across the country. The report shows that solar power combined with energy storage accounted for roughly 79% of all new power capacity added during the first year of the administration.
Interestingly, the majority of these installations occurred in states that supported Donald Trump during the most recent election. This highlights how solar energy development continues to expand even in regions traditionally associated with fossil fuel industries.
Among the states leading solar expansion, Texas installed the largest amount of new solar capacity in 2025, adding approximately 11 gigawatts. Other states that saw strong growth include Indiana, Florida, Arizona, Ohio, Utah, and Arkansas.
Analysts say the continued expansion of solar energy is being driven by strong economic fundamentals. Solar power has become increasingly cost-competitive compared with traditional energy sources, making it an attractive option for utilities and businesses seeking affordable electricity.
At the same time, the rapid growth of artificial intelligence and cloud computing is dramatically increasing electricity demand. Large data centers that support AI technologies require enormous amounts of power, pushing utilities to expand generation capacity more quickly.
Solar energy is emerging as one of the fastest ways to meet this demand because projects can often be developed and deployed more quickly than traditional power plants.
Industry leaders, however, warn that policy uncertainty could slow the pace of development if supportive regulations and incentives are not restored. Darren Van’t Hof, interim president and chief executive of the Solar Energy Industries Association, emphasized the importance of clear government policies for the future of the sector.
He noted that stable policy frameworks are essential for energy markets to function effectively and for developers to keep up with rapidly growing electricity demand across the United States. Without such certainty, he warned, fewer solar projects may be built, which could ultimately lead to higher energy costs for consumers.
The report also provides a long-term outlook for the solar industry. Analysts estimate that the United States could add around 490 gigawatts of new solar capacity by 2036. If those projections are realized, the country’s total installed solar capacity would approach 770 gigawatts.
Experts believe solar energy will continue to dominate new electricity generation in the coming years, even as natural gas power plants also expand to meet growing energy needs.
Michelle Davis, head of solar research at Wood Mackenzie, said the findings show that solar power remains a central part of the country’s future energy mix. She noted that while natural gas generation is expected to grow, solar energy will likely remain the leading source of new power capacity additions in the United States for the foreseeable future.
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