US solar energy growth to slow as Washington priorities shift
KUALA LUMPUR: New US solar energy installations are expected to fall over the next five years as the industry grapples with a shift in federal policy that favors fossil fuels, tariffs and other challenges, according to a report published on Monday by a top solar trade group.
New solar capacity will be more than 10 per cent lower in 2030 than in 2025, according to a forecast by the Solar Energy Industries Association and energy research firm Wood Mackenzie.
The outlook includes the expected effects of new federal tariffs on a range of imported materials that are important to solar projects, including steel and aluminum. But it does not include potential cuts to clean energy tax credits being considered in a Republican budget bill in Congress - another major threat to the industry if passed into law.
Tax credits for clean energy projects and factories contained in former U.S. President Joe Biden's 2022 Inflation Reduction Act have buttressed industry growth in the last three years.
But the bill that passed the House last month could upend what has been a boom in the sector, SEIA warned. Solar accounted for 69 per cent of new electricity generation during the latest quarter.
The industry installed 10.8 gigawatts of capacity in the first quarter of this year, a decline of 7 per cent from a year ago but still near historical highs, the report said. At the same time, eight new or expanded solar factories opened during the quarter in states including Texas and Ohio.
"Those are all positive signs, generally," SEIA President Abigail Ross Hopper said in an interview. "Look at all of this that could be. And the Congress is threatening all of this development."
Trump campaigned on a promise to repeal the IRA tax credits, calling them expensive, unnecessary and harmful to business. His administration has sought to bolster domestic production of fossil fuels as part of its energy dominance agenda, which excludes renewables like solar and wind.
The US solar industry is on track to install 48.6 GW this year, but that will decline to 43.5 GW in 2030, the report said.
Demand from corporate buyers for utility-scale projects is fueling industry momentum, the report said, though concerns about federal policy will constrain development.
Residential installations fell 13 per cent during the first quarter to 1.1 GW. The sector has struggled lately with high interest rates, tariffs and less favorable state policies. But that segment of the market is expected to grow between 2025 and 2030 due to rising electricity rates that make it a more compelling offering to consumers.
The utility sector accounted for 9 GW of installations in the first quarter. Texas, Florida, Ohio, Indiana, and California accounted for 65 per cent of new capacity.
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