U.S. solar installations jump 49% in third quarter, report says

The U.S. solar industry experienced a significant rebound in the third quarter of 2025, with installations rising 49% sequentially, industry analysts reported Tuesday. According to the Solar Market Insight Q4 2025 report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie, the sector added 11.7 gigawatts (GW) of new photovoltaic capacity from July through September,  marking one of the strongest quarters in recent history.

The surge came after a slow second quarter and was driven primarily by utility-scale solar deployments. Through the first nine months of 2025, solar accounted for 58% of all new electricity-generating capacity added to the U.S. grid, pushing total installations past 30 GW for the year.

Policy Incentives and Industry Dynamics

Industry experts linked the increase in installations in part to developers racing to qualify projects for tax incentives under the federal One Big Beautiful Bill Act (OBBBA). The law offers a 30% investment tax credit and bonus adders for solar projects that begin construction by July 2026 or enter service by the end of 2027, creating a strong incentive for deployment in 2025 and early 2026.

Despite the quarterly growth, the report noted that the pace of deployment slowed compared with prior periods due to ongoing supply chain constraints and industry bottlenecks. The residential solar segment declined by about 4% year-over-year in the third quarter, reflecting tight module availability that has hampered rooftop installations nationwide.

Permitting Delays Remain a Major Challenge

Permitting issues continued to weigh on the industry’s growth forecasts. According to SEIA, more than 117 GW of solar and storage projects remain stuck in permitting queues, delaying construction starts and compounding uncertainty for developers. Sean Gallagher, SEIA’s senior vice president for policy, criticized federal permitting processes, arguing that current administrative procedures, particularly by the Interior Department, create barriers that could prevent projects from coming online on schedule.

In response to these challenges, SEIA lowered its near-term residential solar outlook for 2025 and 2026 by 2% and 8%, respectively, while also warning that module supply tightness is expected to persist into next year.

Broader Implications

The rebound in solar installations highlights the continued dominance of renewable energy in new capacity additions in the United States. With utility-scale projects leading the gains, solar is playing a central role in meeting rising electricity demand and decarbonization goals, even as regulatory hurdles and supply chain issues temper expectations for some segments of the market.

As policymakers and industry leaders look toward 2026, the timing of tax credits and the resolution of permitting challenges will be key factors in sustaining the positive momentum seen in the third quarter.