US solar installations soar as developers move to secure tax credits

U.S. solar power installations increased sharply in the third quarter of 2025 as developers accelerated construction to qualify for expiring federal tax credits.

The industry added 11.7 gigawatts direct current of solar capacity during the quarter. That marked a 20% increase from the same period last year and a 49% rise from the second quarter.

The Solar Energy Industries Association and Wood Mackenzie reported the figures in the U.S. Solar Market Insight Q4 2025 report. The quarter ranked as the third-largest for solar deployment in U.S. history.

The report said most of the growth came from utility-scale projects. Many of these projects were largely completed in the second quarter but reached installation milestones in the third.

Market activity rebounded after disruption earlier in the year following passage of the One Big Beautiful Bill Act. The legislation altered eligibility timelines for federal renewable energy tax incentives.

Under the law, wind and solar projects must begin construction by July 4, 2026, to qualify for the Investment Tax Credit or the Production Tax Credit. Projects that do not meet that deadline must be fully placed in service by December 31, 2027, to remain eligible.

SEIA and Wood Mackenzie said the new rules have increased pressure on developers to move projects forward quickly. They added that utility-scale solar installations reached a third-quarter record.

The report also noted that a federal permitting freeze has introduced additional uncertainty and risk for future development. Developers are seeking to meet legal definitions for starting construction as early as possible.

Wood Mackenzie said these conditions are expected to drive a rush of activity among projects that are already well positioned.

Solar and energy storage accounted for 85% of all new power generation capacity added to the U.S. grid in the first nine months of the Trump Administration, according to SEIA.

SEIA also said 73% of all solar capacity installed this year was built in states won by President Trump. Eight of the ten leading states for new installations were Texas, Indiana, Florida, Arizona, Ohio, Utah, Kentucky, and Arkansas.

SEIA President and Chief Executive Officer Abigail Ross Hopper said future solar and storage development faces uncertainty unless current policies change.