The U.S. solar industry is projected to see a decline in new solar installations over the next five years due to federal policy shifts favoring fossil fuels, tariffs, and other challenges, according to forecasts released on Monday by the Solar Energy Industries Association (SEIA) and energy research firm Wood Mackenzie.
New solar capacity additions in 2030 are expected to be more than 10% lower than in 2025, the outlook shows.
The forecast encompasses the anticipated impact of new tariffs imposed by the federal government on a range of imported materials crucial for solar projects, including steel and aluminum. However, it does not account for potential cuts to clean energy tax credits being considered in a Republican budget bill in Congress—a move that would pose another significant threat to the U.S. solar industry if passed.
Tax credits for clean energy projects and factories, included in former President Biden’s 2022 Inflation Reduction Act, have underpinned the industry’s growth over the past three years. But SEIA has warned that the tax bill passed by the U.S. House of Representatives last month could undermine the industry’s boom.
Solar power accounted for 69% of new U.S. electricity generation capacity in the most recent quarter.
According to the 2025 Q2 Solar Market Insight Report, jointly released by SEIA and Wood Mackenzie, the industry installed 10.8 gigawatts (GW) in the first quarter of this year, a 7% decline from the same period last year but still near record levels. Meanwhile, eight new or expanded solar factories began operations in the first quarter across several states, including Texas and Ohio.
“Overall, these are positive signs,” SEIA President Ross Hopper said in an interview. “But look at everything that could happen next—Congress is threatening all of this progress.”
During last year’s election campaign, former President Trump promised to scrap clean energy tax credits in the Inflation Reduction Act, calling them costly, unnecessary, and harmful to businesses. As part of his energy dominance agenda, the Trump administration, upon taking office this year, has been seeking to boost domestic fossil fuel production while excluding renewable energy sources like solar and wind.
The report indicates that the U.S. solar industry is on track to add 48.6 GW of new capacity this year, but this figure is expected to decline to 43.5 GW by 2030.
Demand from corporate buyers for utility-scale projects is driving the industry’s momentum, but concerns about federal policy will constrain growth, the report notes.
In the first quarter, residential installations fell 13% to 1.1 GW. The sector has been plagued by high interest rates, tariffs, and unfavorable state policies in recent times, but this segment is expected to grow between 2025 and 2030 as rising electricity costs make it more attractive to consumers.
The utility sector added 9 GW of new capacity in the first quarter. Texas, Florida, Ohio, Indiana, and California accounted for 65% of the new additions.
