US solar installation forecast slashed due to Trump policies, report says

A new report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie forecasts a 27% reduction in U.S. solar capacity installations between 2026 and 2030 compared to pre-Trump tax law projections, attributing the decline to rolled-back subsidies and policies aimed at stifling clean energy development. This anticipated slowdown, despite recent domestic manufacturing growth and significant installations in states won by Trump, is expected to raise energy costs and jeopardize grid reliability, highlighting regulatory headwinds for the sector.

Analysis

A joint report from the Solar Energy Industries Association and Wood Mackenzie projects a significant downturn for the U.S. solar sector, forecasting that installation capacity between 2026 and 2030 will be 27% lower than previously anticipated. This revision is directly attributed to the policy environment under the Trump administration, specifically the rollback of subsidies and the imposition of import tariffs, which are seen as 'deliberately stifling investment'. The financial impact is already materializing, with Q2 utility-scale solar costs rising 4%, commercial costs climbing 10%, and residential costs increasing 2%. This negative medium-term outlook contrasts sharply with recent underlying strength; solar and storage constituted 82% of new U.S. electricity capacity in the first half of 2025, and domestic module manufacturing capacity expanded by 13 GW to a total of 55 GW in the same period. Notably, over three-quarters of the solar capacity installed in 2025 was in states won by Trump, indicating that industry growth is geographically broad-based but now faces significant headwinds from federal-level regulatory and fiscal policy changes.

Key Decisions for Investors

• Investors with exposure to the U.S. solar sector should increase their focus on policy and regulatory risk, as the projected 27% installation decline indicates these factors are now the primary driver of the medium-term outlook.
• Given the reported 4-10% quarterly increase in system costs due to tariffs and permitting, it is critical to re-evaluate companies' margin resilience and pricing power, particularly for developers and installers.
• The bifurcation between strong recent installation figures and a negative 2026-2030 forecast suggests investors should reconsider long-term growth assumptions and potentially favor companies with business models less dependent on federal subsidies or those with greater geographic diversification outside the U.S.