Record Year for U.S. Solar Installations
The U.S. solar industry embarked on 2025 with an auspicious start, installing 10.8 GWdc of capacity in the first quarter. Despite a 19% decrease from the previous quarter and a 15% decrease from the first quarter of 2024, the sector is poised for a record-breaking year in installations.
According to the U.S. Solar Market Insight Report by the Solar Energy Industries Association (SEIA) and Wood Mackenzie, the residential and commercial solar sectors are witnessing robust growth. This surge is driven by an impressive project pipeline and the ongoing benefits of the Inflation Reduction Act (IRA), which provides critical support to the industry.
The commercial solar market achieved a new quarterly high with 1.3 GWdc installed in Q1. This represents a remarkable 108% increase compared to the same period last year, setting the groundwork for an unprecedented year in 2025. SEIA and Wood Mackenzie project the U.S. will add at least 7.1 GWdc of commercial solar capacity by the year’s end.
Resilience in Residential U.S. Solar Installations
Residential solar installations reached their second-highest quarterly figure ever, with 1.7 GWdc installed. The report projects that this segment will establish a new annual record, with 8.5 GWdc anticipated by the end of 2025. For the past two years, residential solar installations have consistently surpassed 1.5 GWdc per quarter, underscoring the sector’s resilience and growth potential despite economic challenges.
Abigail Ross Hopper, SEIA president and CEO, remarked, “The American solar industry is thriving as more families and businesses choose to go solar. With the IRA in place, the solar industry is building momentum and creating a more resilient, reliable, and affordable clean energy future.”
Utility-Scale Challenges in U.S. Solar Installations
The utility-scale solar sector installed 7.8 GWdc in Q1, marking a 25% decline from the first quarter of 2024. This drop is attributed to supply chain constraints, project delays, and a slowdown in new project additions. The industry is still recovering from disruptions caused by the global pandemic and subsequent economic hurdles.
Despite these challenges, the U.S. installed 31.7 GWdc of solar capacity in 2024, a slight dip from the previous year. However, the industry is on the cusp of a significant rebound in 2025, with 43.1 GWdc of installations projected. This growth is largely fueled by the IRA’s long-term tax incentives, which provide stability and predictability for solar developers and investors.
Future Outlook for U.S. Solar Installations
The report forecasts that the U.S. solar market will install 274 GWdc of new solar capacity over the next five years. This growth will be driven by sustained policy support, technological advancements, and decreasing costs, making solar energy increasingly accessible and affordable for consumers.
Michelle Davis, Head of Global Solar at Wood Mackenzie, stated, “2025 is set to be a record-setting year for the U.S. solar market, with residential and commercial solar leading the way. The IRA is providing a strong foundation for growth, and we expect to see continued momentum in the coming years as the market expands and matures.”
The U.S. solar industry’s record-setting first quarter of 2025 underscores the sector’s resilience and growth potential, despite challenges in the utility-scale segment. With the backing of the IRA and a robust project pipeline, the industry is well-positioned to achieve its annual record installation goal of 43.1 GWdc by year-end.