The U.S. solar sector installed 43 gigawatts (GW) of new capacity in 2025, down from nearly 50 GW in 2024, according to a study released by the Solar Energy Industries Association (SEIA) and Wood Mackenzie. The report attributes the slowdown in part to policy actions taken by the current administration, including the removal of subsidies and tax incentives for renewable energy developers.
Industry analysts highlighted the impact of the One Big Beautiful Bill Act, which the report says has produced an industry-wide disruption. Under that legislation and related administrative steps, utility-scale solar additions fell 16% in 2025, while community solar deployments dropped 25% during the same period.
Beyond changes to incentive structures, the report points to tariff pressures and a freeze on approvals for major projects under the administration. Those developments reflect a federal energy agenda that the report characterizes as emphasizing oil, gas, coal and nuclear power and marking a departure from the prior administration's green energy policies.
Despite the policy-induced slowdown, solar and energy storage together still represented 79% of new capacity additions in the first year of the Trump administration, the study found. More than two-thirds of the 2025 installations occurred in states carried by the president during the most recent election cycle.
At the state level, Texas led the nation with 11 GW of newly installed solar capacity in 2025. It was followed by Indiana, Florida, Arizona, Ohio, Utah and Arkansas, according to the report. The rankings underline the uneven geographic distribution of recent build activity even as national totals softened.
The study also underscores that solar power remains cost-competitive in many markets. It notes that electricity demand from data centers dedicated to AI is surging to record highs, a factor that sustains commercial interest in low-cost generation and storage solutions.
SEIA interim President and CEO Darren Van’t Hof stressed the need for clearer federal policy, saying: "Washington must deliver policy certainty for the market to work and to keep pace with growing energy demands." He added a warning about the consequences of uncertainty: "Without this certainty, less solar will get built and Americans will pay the price with higher energy bills."
Looking further ahead, the report projects strong cumulative growth even with the near-term hiccup. It estimates the U.S. will add 490 GW of new solar capacity by 2036, bringing cumulative installed capacity to nearly 770 GW.
Wood Mackenzie’s head of solar, Michelle Davis, emphasized solar's continued role in new generation supply, saying: "It’s clear that solar will continue to be the dominant source of new power capacity in the U.S., even as gas generation continues to grow." The statement reflects the study's view that, despite policy shifts and short-term declines, solar plus storage will remain central to additions in the coming decade.
Policy changes and administrative actions in 2025 altered the short-term trajectory of U.S. solar growth, but the industry groups behind the report still see a pathway to substantial cumulative capacity expansion by 2036. Stakeholders highlighted in the study include project developers, utilities, state power markets and large electricity consumers such as data centers, where rising AI-related demand is shaping power needs.