The United States installed 43 gigawatts (GW) of new solar capacity in 2025, consolidating solar power as the largest source of new electricity generation for the fifth consecutive year, according to the latest U.S. Solar Market Insight 2025 Year in Review report published by the Solar Energy Industries Association (SEIA) in collaboration with Wood Mackenzie.

The report shows that solar and energy storage accounted for 79% of all new power capacity added to the US grid during the first year of the Trump Administration, highlighting the continued dominance of clean energy technologies despite regulatory and policy challenges.

More than two-thirds of the solar capacity installed in 2025 was deployed with Texas, Indiana, Florida, Arizona, Ohio, Utah and Arkansas ranking among the top ten states for new solar additions.

Despite regulatory measures targeting clean energy and shifts in tax policy, the economics of solar remain strong. According to the report, solar energy is one of the few technologies capable of rapidly meeting rising electricity demand, particularly as the expansion of data centers accelerates energy consumption across the country.

Looking ahead, the study forecasts that the United States could install 490 GW of additional solar capacity by 2036, bringing the nation’s total installed solar capacity close to 770 GW.

“Solar and storage continue to dominate new capacity additions to the grid despite policy headwinds,” said Darren Van’t Hof, interim president and CEO of SEIA. He noted that households and businesses are increasingly adopting solar paired with battery storage as a fast and affordable way to meet growing electricity demand.

However, Van’t Hof warned that greater policy certainty from Washington will be necessary to sustain the sector’s growth. Without stable regulatory frameworks, he said, fewer solar projects may be built, potentially leading to higher electricity costs for consumers.

According to Michelle Davis, head of solar at Wood Mackenzie and lead author of the report, solar is expected to remain the dominant source of new power capacity in the United States, even as natural gas generation expands.

“Strong demand growth combined with escalating costs of new gas plants will allow solar to remain competitive, even without tax credits,” Davis said.

The report also examines several policy-driven scenarios that could affect future solar deployment. Key factors include pending trade measures, final guidance on Foreign Entity of Concern provisions and the ability of projects to secure permits, all of which could influence how much new capacity ultimately comes online.

In particular, the residential solar sector is facing challenges due to tax policy changes introduced in 2025. More restrictive policies could slow installations, tightening electricity supply and placing upward pressure on power prices, the report warns.

At the same time, 2025 marked a significant milestone for the domestic solar manufacturing industry. Following the opening of a wafer manufacturing facility in the third quarter, the United States now has the capability to produce all major components of the solar supply chain domestically. Module manufacturing capacity increased by more than 50% during the year, reaching 65.5 GW.

At the state level, Texas remained the fastest-growing solar market, installing 11 GW of new capacity in 2025, the highest in the country. Overall, 11 states set new annual installation records, while 12 states added more than 1 GW of solar capacity.

Among the fastest-growing markets, Indiana and Utah recorded particularly strong growth. Indiana deployed nearly 3 GW of solar capacity in 2025, up from 1.6 GW in 2024, reflecting the rapid expansion of utility-scale solar projects in the Midwest.