For solar, a tale of two 2025s

Dec. 31 was the last day to qualify for a federal tax credit for installation of rooftop solar panels. That’s just one of the policy changes in Washington that clouded the outlook for the solar industry this year. Other tax credits for large, commercial solar installations are still available, but they’ll end years earlier than originally planned — per President Donald Trump's tax and spending bill passed in July.   

And yet, according to the energy analytics firm Wood Mackenzie, solar made up 58% of all new energy generation through the first nine months of this year.  

”I will borrow a phrase from a renowned author. ‘It was the best of times, and it was the worst of times’,” said Abigail Ross Hopper with the Solar Energy Industries Association, describing solar energy’s 2025.

Solar companies now have a lot less time to qualify for federal tax credits. And, she said, some solar projects have had trouble getting federal permits.

“There have been delays and stoppages and just outright, like lack of response from federal agencies,” Ross Hopper said.

And yet, we just keep building more solar. Partly, because those tax credits are going away.

“And that gives extra reason for developers to try to build their solar projects now,” said Daniel Cohan, a professor of environmental engineering at Rice University.

Solar is also growing because energy demand is rising fast. From new data centers, manufacturing plants, and electric vehicles.  

“The only source of new power that can grow very quickly and scale up is solar. Every other source of energy has key barriers that keeps it from growing in the near term,” Cohan said.

New coal plants aren’t really a thing. The Trump administration has shut down several major offshore wind power projects. Nuclear power will take five to ten years to build, Cohan said. And new natural gas turbines are backlogged.

“There's only so much new natural gas power capacity that can be added anytime soon. That leaves solar as the biggest option and really, the only one that can be scaled up in the next few years,” he said.

It’s also gotten cheap. So have battery storage systems, said Rob Gramlich, head of the consulting firm Grid Strategies. Put solar panels and batteries together, and you can power the grid even when the sun isn’t shining.  

“You can run most of the grid on solar through the afternoon and then into the evening, when you're still running air conditioning in the hot summers, then you have the batteries that were charged in the afternoon delivering power through the evening,” Gramlich said.

It’s been a really good year for that combo. The energy analysis firm Wood Mackenzie finds that solar and storage together made up 85% of all new power generation in the first nine months of this year.

Correction (Jan. 8. 2025): A previous version of this story misspelled Abigail Ross Hopper’s name.