FERC Data: U.S. Solar Installations Plunge 22% in 2025, Fourth Quarter Crash at 40%

The U.S. solar expansion hit a major speed bump in 2025, with new installations falling sharply despite a policy-driven race to build. According to data from the Federal Energy Regulatory Commission (FERC), solar developers installed 26.5 gigawatts (GW) last year, a 22% decline from the 33.8 GW installed in 2024. This drop occurred even as the industry scrambled to complete projects before key Inflation Reduction Act (IRA) tax credit timelines were curtailed by the One Big Beautiful Bill Act, signaling that policy changes and other headwinds are having a tangible impact on deployment rates.

The Solar Energy Industries Association (SEIA) provided a more granular view of the slowdown, noting that installations held steady through the first three quarters of 2025. The collapse came in the final quarter, with volumes plummeting nearly 40% year-over-year. By year's end, total installations reached just under 35 GW, as numerous utility-scale projects were delayed or canceled. This fourth-quarter cliff suggests a confluence of challenges—potentially including supply chain issues, interconnection delays, and financing pressures—intensified as the year progressed.

Despite the annual decline, solar remained the leading source of new electricity generation capacity added in 2025, underscoring its continued, albeit slowed, momentum in the U.S. energy mix. FERC's December data shows solar now constitutes 12.2% of the nation's total installed generating capacity, placing it third behind natural gas (42.2%) and coal (14.3%). The sharp downturn, particularly the Q4 crash, raises immediate questions about the sector's near-term growth trajectory and its ability to meet long-term clean energy targets amid evolving policy and market conditions.