US solar industry sees tariffs creating headwinds, curbing growth through 2030

Solar energy's growth in the US is expected to slow over the next five years as headwinds from President Donald Trump's tariff policies begin to take a toll on residential and utility-scale projects, according to a new industry report.

The US added 8.6 GW of solar module manufacturing capacity in the first quarter of 2025, the Solar Energy Industries Association said in a market report published June 9. New factories in Arizona, Ohio and Texas drove the third-largest quarter for new manufacturing capacity on record.

Solar cell production capacity also surged, doubling to 2 GW as a factory in South Carolina came online, according to SEIA, the industry's largest trade group.

Despite these quarterly gains, the report said that a number of headwinds facing the industry could begin to erode growth in power projects.

"Economywide tariff uncertainty, new antidumping and countervailing duties on cells and modules from Southeast Asia, and potential shifts in federal energy incentives could significantly hinder US solar deployment and manufacturing, risking energy shortages, job losses and factory closures," SEIA said in a news release.

Abigail Ross Hopper, SEIA's president and CEO, said the industry's success in adding more new capacity to the grid than any other generation technology is now at risk. Hopper's concerns are primarily focused on a budget bill making its way through the Senate that looks to roll back vital tax credits for the solar industry.

"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," Hopper said.

Tariff headwinds

Even if the tax credits are not rolled back, the solar sector still faces substantial headwinds from Trump's tariff policies. The SEIA report, compiled by consultants at Wood Mackenzie, said the tariffs levied in the second quarter could lead to similar problems as those Hopper projected if the budget bill passes in its current form.

The five-year outlooks for all industry segments declined compared to last quarter, with the exception of community solar, which remained flat. SEIA and Wood Mackenzie reduced their forecast for residential solar deployments by 14% and cut expectations for utility-scale project deployments by 6%.

Overall, the industry is projected to contract by 2% annually between 2025 and 2030 in the report's base-case scenario, but the US will still add approximately 43 GW of capacity on average each year. Between 2025 and 2027, the average rate of decline will be 7%.

"Policy uncertainty and rising costs due to tariffs will impact market growth across all solar segments," the report said. "Proposed tax credit changes and stricter regulations on foreign entities could also result in a more significant market contraction."

AI could drive rebound

The report predicts that solar installations will increase by 3% between 2028 and 2030 as the industry's supply chain shifts to domestic sources and increased energy demand from artificial intelligence and datacenters creates more demand for solar and storage.

Wood Mackenzie said it is now tracking nearly 140 GW of proposed datacenter facilities, up from approximately 50 GW a year ago. "Moreover, reshoring of manufacturing in clean energy and other industries presents additional large-load facilities that will increase electricity demand," the report said.

The report said supply chain constraints on gas turbines and the escalating cost of constructing new gas plants will allow solar to play a vital role in helping to meet growing electricity demand.