The boom in US and Europe solar markets are fading

The EU’s long run of record solar installations could end this year as lower wholesale power prices have cooled demand for rooftop panels. Solar Power Europe now expects new capacity in 2025 to be 1.4% below last year’s total, the first annual drop since 2016.

Still, the additions remain high by historical standards according to Bloomberg. Meanwhile during the sunniest months a surplus of solar power can sometimes push prices below zero.

Solar Power Europe estimates roughly 64.2 gigawatts of additional solar capacity will come online in 2025, a projection that differs from BloombergNEF’s forecast for modest growth later this year.

Home installations are slowing down the most. Previously, decreasing module costs, attractive subsidies and elevated power expenses spurred households to install roof‑ and balcony‑mounted panels. However, with installations saturating markets, supply has routinely exceeded uptake in peak seasons, prompting some governments to scale back support while wholesale rates retreat from the post‑Ukraine conflict highs.

Meanwhile, large‑scale solar farms continue to expand, though they confront challenges as corporate offtake agreements diminish, potentially increasing reliance on public financial backing to sustain growth.

U.S. subsidy cuts create big uncertainty for clean energy projects

Singapore’s Bila Solar has halted an expansion at its Indianapolis facility, Reuters reported. Canada’s Heliene is reassessing its Minnesota solar‑cell plant proposal, while Norway’s NorSun deliberates on a wafer‑production site in Tulsa, Oklahoma.

Moreover, two authorized offshore wind projects, a 300 MW development off Maryland and a 791 MW project off Massachusetts, risk cancellation.

These developments come after Congress, led by House Republicans, agreed in a recent budget deal to accelerate the phase‑out of solar and wind tax incentives, and the White House issued directives to narrow qualification criteria for the subsidies still in place.

Advocacy organizations and market observers caution that this policy shift threatens the U.S. clean‑energy trajectory.

Wood Mackenzie estimates a potential drop of up to 17% in solar and 20% in wind capacity additions over the next ten years, which could slow the growth of AI data centers.

Rhodium calculates that $263 billion of wind, solar, and storage undertakings and $110 billion of related manufacturing investments are jeopardized, and anticipates industrial electricity expenses could increase by $11 billion by 2035.

The REPEAT Project projects that tighter supply could inflate average household power bills by roughly $280 annually by 2035. Meanwhile, ICF forecasts a 25% surge in U.S. electricity demand by 2030 because of growing AI and cloud computing, which could make it harder to meet emissions goals.

Tax credit deadline revision adds pressure on developers and manufacturers

Under the revised legislation, the 30% investment tax credit for renewables will expire earlier. Eligible projects must now start building within one year of enactment or be operational by December 31, 2027, rather than having until 2032.

Trump’s order to redefine “start of construction” now threatens the 4‑year, 5% tax‑credit window as developers race to meet the new deadlines.

“With so many moving parts, financing projects and building factories is difficult, if not impossible,” said Martin Pochtaruk, CEO of Heliene.

In Indianapolis, Mick McDaniel, general manager at Bila Solar, said “a troubling level of uncertainty” forced a halt to a $20 million expansion that would have added around 75 jobs.

NorSun’s American operations continue to evaluate the implications of the revised statutes and executive directives on its proposed $620 million wafer facility. Five other manufacturers, T1 Energy, Imperial Star Solar, SEG Solar, Solx and ES Foundry, say they’re concerned about demand but haven’t yet altered their plans.

Offshore wind prospects are similarly uncertain.

Both US Wind’s 300 MW Maryland development and Iberdrola’s 791 MW New England Wind have secured permits but confront a narrowing timeframe to commence construction before credits expire.

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