By Mark Jaffe, EUCI energy writer
Solar and storage continued to dominate in new capacity in the first half of 2025, accounting for 82% of all new installations, but the sector faces headwinds from Trump administration policies with some areas already faltering.
In the first half of the year, 18 gigawatts (GW) of solar were installed, 56% of the total installed capacity, and storage accounted for 26%, about 8.3 GW, according to a report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie.
By the second quarter, however, the pace was slowing down with 7.5 GW of solar capacity installed, a 24% drop year-over-year and a 28% decline from the first quarter.
The decrease was even more pronounced in some segments. Community solar installations were down 52% in the second quarter compared to the second quarter of 2024 and down 34% from the first quarter of 2025. Utility-scale solar was down 28% year-over-year.
“Passage of the One Big Beautiful Bill Act has fundamentally changed the policy landscape for the energy industry,” the report said.
The act, officially HR 1, curtailed for wind and solar the Investment Tax Credit, equal to 30% of a project’s cost, and the Production Tax Credit, which provides a 2.75 cent credit for each kilowatt-hour a project generates in the first 10 years of operation.
To qualify, a project must start construction by July 2025 or be placed in service by 2028. The two credits can equal as much as 50% of a project’s cost.
“The Trump administration is deliberately stifling investment, which is raising energy costs for families and businesses, and jeopardizing the reliability of our electric grid,” Abigail Ross Hopper, the SEIA’s president and CEO, said in a statement.
In addition, the Department of Interior and the U.S. Treasury are tightening permitting requirements.
On July 15, an Interior memo stated that Interior Secretary Doug Burgum will need to personally sign off on numerous types of federal permitting approvals for a solar project to move forward.
Treasury issued new guidance on Aug. 15 that made changes to the formal definition of “beginning of construction” for solar projects to earn federal tax credits.
“There is considerable downside risk for the solar industry if the federal permitting environment creates more constraints for solar projects,” Michelle Davis, head of solar research at Wood Mackenzie, said in a statement.
“The solar industry is already navigating dramatic policy changes as a result of HR1. Further uncertainty from federal policy actions is making the business environment for the solar industry incredibly challenging,” Davis said.
Wood Mackenzie forecasts that these policies could lead to 55 GW less solar deployment by 2030, a 21% decline from the forecast before HR 1 was passed.
Solar developers are trying to speed projects in their pipelines, and Wood Mackenzie estimates that there are about 50 GW of projects “well-positioned to start construction before the end of the year” and another 40 GW in line to start construction in the first half of 2026.
The Trump administration’s tariff policy is also raising the cost of solar projects as imported materials are facing a baseline 10% tariff. Residential system prices are up 2% over last year, with commercial systems up 10% and utility-scale up 4%.
“While a 90-day pause on reciprocal tariffs was announced, the baseline tariffs remained in effect and contributed to price increases across solar market segments,” the report said.
The anti-dumping case on solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam, which began in April 2024 and was finalized on May 20, 2025, increased module costs by 13% year-over-year.
Texas installed the most solar capacity in the first half of 2025, 3.8 GW, followed by California, Indiana, Arizona, and Florida.
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