The US solar energy market will slow down as Washington shifts its priorities
A report released on Monday by the top solar trade association predicts that the number of new solar energy installations in the United States will decline over the next five-year period as the industry struggles with a federal policy shift favoring fossil fuels and tariffs.
According to the Solar Energy Industries Association's and Wood Mackenzie's forecast, new solar capacity in 2030 will be over 10% less than it was in 2025.
This includes an assessment of the impact of federal tariffs that will be imposed on steel and aluminum, two materials important for solar projects. It does not, however, include the potential reductions in clean energy tax credit that are being considered by a Republican budget proposal in Congress. This would be a major threat to industry if it were to become law.
The 2022 Inflation Reduction Act, authored by former U.S. president Joe Biden, contains tax credits for clean energy and factories that have boosted industry growth over the past three years.
SEIA has warned that the bill passed by the House of Representatives last month may upset the boom in this sector. Solar generated 69% of the new electricity during the last quarter.
According to the report, the industry installed 10,8 gigawatts in the first three months of the year. This is a decrease of 7% compared to a year earlier, but it's still close historical highs. Eight new or expanded factories for solar energy were opened in the first quarter of this year, including Texas and Ohio.
Abigail Ross Hopper, President of SEIA, said in an Interview: "Those are generally positive signs." "Look at what could be." "And the Congress is threatening this entire development."
Trump ran his campaign on a promise that IRA tax credits would be repealed, calling them costly, unnecessary, and damaging to businesses. As part of his energy dominance plan, Trump's administration is attempting to boost domestic fossil fuel production. This excludes renewables such as solar and wind.
The report stated that the U.S. industry will install 48,6 GW of solar power this year. However, by 2030, it is expected to drop to 43.5 GW.
The report stated that the industry is gaining momentum due to corporate demand for large-scale utility projects, but concerns over federal policy will slow down development.
Residential installations dropped 13% to 1.1 GW in the first quarter. In recent years, the sector has been struggling with high interest rates and tariffs as well as less favorable policies from the state. This segment is expected to grow from 2025 to 2030, due to the rising electricity prices that will make it more attractive to consumers.
Utility sector installations accounted for nine GW in the first quarter. Texas, Florida Ohio Indiana and California were responsible for 65% of the new capacity. (Reporting and editing by David Gregorio; Nichola Groom)
(source: Reuters)
