U.S. Solar Growth Faces Tax Credit and Tariff Challenges

The United States just saw one of its strongest quarters in solar capacity additions on record, but growth will slow down going forward due to the federal trade and energy policies, the Solar Energy Industries Association (SEIA) said on Monday.

During the first quarter of the year, the U.S. solar industry installed 10.8 gigawatts direct current (GWdc) of capacity, down by 7% from Q1 2024 and a 43% decrease compared with Q4 2024, but still the fourth largest quarter on record, according to the quarterly report by SEIA and Wood Mackenzie.

Solar accounted for 69% of all new electricity-generating capacity added to the U.S. grid in January-March.

Moreover, the industry added 8.6 gigawatts of new solar module manufacturing capacity—this was the third-largest quarter for new manufacturing capacity on record.

Texas and Florida, as well as several other states that President Donald Trump won in the 2024 presidential election, were the leaders in solar power installations, the report showed.

Therefore, the association warned that if Congress fails to modify the changes to energy tax incentives passed by the House, “jobs, investments, and factories in Trump country will be hit the hardest.”

Solar’s success is at risk, SEIA president and CEO Abigail Ross Hopper said, adding that “If Congress fails to fix the legislation passed by the House – which would render the energy tax incentives unusable – lawmakers will trigger a dangerous energy shortage that will raise our electric bills and stop America’s manufacturing boom in its tracks.”

The base case forecasts in the report reflect the expected impacts of the latest U.S. tariffs, but they exclude potential tax credit changes or other provisions proposed in the most recent budget reconciliation bill.

“If Congress cuts energy tax incentives, SEIA’s analysis projects that energy production will fall 173 TWh and the United States will not be able to meet demand or compete with China in the global race to power AI,” the association warned.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com

 

  • Related Posts

    Oil Prices Fall as Trump Considers Easing Sanctions on Shadow Fleet Tankers

    Crude oil prices retreated from yesterday’s highs earlier today, on the news that President Trump was considering lifting sanctions on tankers used to transport oil and fuels from Venezuela, Russia,…

    US Crude Oil Inventories See Massive Drop Off

    The American Petroleum Institute (API) estimated that crude oil inventories in the United States fell by a massive 11.12 million barrels in the week ending October 9. In the week…

    Have You Seen?

    Pulsar agrees conditional $1 land deal for Minnesota helium and CO2 hub

    • October 15, 2026
    Pulsar agrees conditional $1 land deal for Minnesota helium and CO2 hub

    Podcast | CO2, E-fuels and the need for pace

    • October 15, 2026
    Podcast | CO2, E-fuels and the need for pace

    Houthis Vow More Attacks After Strike on Aramco Headquarters

    • October 15, 2026
    Houthis Vow More Attacks After Strike on Aramco Headquarters

    US Crude Oil Inventories See Massive Drop Off

    • October 15, 2026
    US Crude Oil Inventories See Massive Drop Off

    Oil Prices Fall as Trump Considers Easing Sanctions on Shadow Fleet Tankers

    • October 15, 2026
    Oil Prices Fall as Trump Considers Easing Sanctions on Shadow Fleet Tankers

    North Sea Production Emissions Fall for 6th Straight Year

    • October 15, 2026
    North Sea Production Emissions Fall for 6th Straight Year

    Gevo lands first multi-year CDR deal from North Dakota BECCS facility

    • October 15, 2026
    Gevo lands first multi-year CDR deal from North Dakota BECCS facility

    Ukraine seeks new manager for seized rare gas assets

    • October 15, 2026
    Ukraine seeks new manager for seized rare gas assets

    HPERC Approves Fifth Amendment To Consumer Grievance Redressal Regulations 2026 In Himachal Pradesh

    • October 15, 2026
    HPERC Approves Fifth Amendment To Consumer Grievance Redressal Regulations 2026 In Himachal Pradesh

    India Advances Clean Energy Transition, Targets Global Leadership in Solar, Wind and Energy Storage – Report

    • October 15, 2026
    India Advances Clean Energy Transition, Targets Global Leadership in Solar, Wind and Energy Storage – Report