A quick review of recent energy-related headlines in the U.S. seemingly portends unending challenges for the solar energy industry.
Shortly after taking office, the current administration issued Executive Order No. 14154, declaring a "national energy emergency" based, in part, on a perception of an "inadequate and intermittent energy supply."
This order laid the groundwork for federal agencies to streamline environmental reviews for certain types of energy projects — but not solar energy, which was excluded from the orders' definition of "energy."
The budget reconciliation package that just passed the Senate would phase out the existing renewable energy investment tax credit, including for solar energy projects, by the end of 2027, disallowing tax credits for residential solar facilities entirely.
Under the bill, the 30% tax credit homeowners can currently claim after they install solar will be eliminated within 180 days after the bill is signed, with other tax credits for nonresidential solar installations likely being phased out more gradually over time.
High interest rates and tariffs are compounding concerns regarding the viability of near-term solar development. The U.S. Department of Commerce recently announced its decision — which was subsequently affirmed by the U.S. International Trade Commission — to impose tariffs of as much as 3,400% on solar panels and cells imported from some of the top producers of these products — Cambodia, Malaysia, Thailand and Vietnam.
While these tariffs, plus the administration's signature reciprocal tariffs on nearly all countries in the world, could help bolster the growing American solar manufacturing industry, they will create near-term pressures for solar developers and others seeking to install solar panels. Amid this landscape, several major residential solar companies have declared bankruptcy.
Last month, Houston-based residential solar provider Sunnova Energy Corp. filed for Chapter 11 bankruptcy protection. California residential solar lender Solar Mosaic and the U.S. manufacturing affiliate of Swiss solar panel maker Meyer Burger have done the same in recent weeks, citing uncertainty around tax credits and the general economic outlook.
The story for solar energy's growth in the U.S., however, is not that straightforward.
According to a recent U.S. Energy Information Administration report, solar generation capacity grew 26% between March 2024 and March 2025. Solar module and solar cell manufacturing also grew in the U.S. during the beginning of 2025, in part due to new or expanded factories in Texas, Ohio, Arizona and South Carolina.
In 2024, solar energy accounted for 66% of all new electricity-generating capacity added to the U.S. grid. The EIA expects utility-scale solar to continue leading new generating capacity added to the grid.
Even without tax subsidies, utility-scale solar energy remains one of the most cost-effective forms of new-build energy generation, at least according to some analyses. Indeed, developers continue to secure financing for solar projects, recent headwinds aside.
At the same time, the amount of residential solar installed in the country continued its declining trend in 2024 and into the beginning of 2025. The reasons for this are multiple, including general economic uncertainty, high lending costs and perhaps certain markets hitting saturation.
What trends will emerge in the current economic and political climate remain to be seen. According to a recent report by renewable energy nonprofits E2 and the Clean Economy Tracker, over $15.5 billion in new factories and clean energy projects — and 12,000 corresponding expected new jobs — have been canceled or delayed since January.
Should the budget reconciliation bill be signed into law with its current cuts to clean energy tax and investment credits, investors could pull back over $500 billion of clean energy investments that represent new and expanded clean electricity generating facilities.
Some companies may be able to weather this storm. Analysts have opined that Sunnova and Solar Mosaic's challenges may have related to how they managed assets in their portfolio by choosing to take on more debt rather than selling off more of their portfolio to raise cash.
Notwithstanding the potential elimination of tax credits, costs of developing solar projects may continue to drop as the industry matures. And despite uncertainty regarding this administration's support for solar energy projects, the U.S. Bureau of Land Management in April approved the Elisabeth Solar Project, a 270-megawatt utility-scale solar project on federal lands.
States may begin to step up their own incentives for solar, following Massachusetts' lead, or a future Congress could reinvigorate tax credits, should the current one act to phase them out.
Historically, solar and wind incentives have enjoyed bipartisan support. It is not yet clear if such support will reemerge at sufficient levels, although there are recent examples of legislators on both sides of the aisle calling to save some clean energy credits.
In the meantime, uncertainty prevails and may lead to industry shake-ups, while the industry's recent trend of strong growth points to a possible path forward, although new economic conditions will test the strength of the trend.
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