Trump Casts Shadow Over US Solar Industry Outlook

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The US solar industry enjoyed another record setting year in 2024, according to data compiled by the Solar Energy Industries Association. All else being equal, the boom times will continue into this year and beyond. Of course, now that President Trump and his top advisor, Tesla CEO Elon Musk, have crashed the US economy in just a matter of weeks, that’s not a sure thing…

Will Tesla Lose Its Footing In The US Energy Storage Industry, Too?

Before we get to that new SEIA report, I have a question for our readers. Do you think Tesla’s energy storage business in the US will follow in the footsteps of its electric vehicle business?

Tesla is a diversified firm, but it has been de-emphasizing its solar business since acquiring the leading US firm SolarCity in 2016. Instead, the company has been focusing like a laser on the US energy storage market. That makes sense in the great scheme of things. Energy storage has been following solar industry trendlines, and solar is growing like hotcakes.

In the meantime, though, Tesla’s EV sales have fallen off a cliff in the US, Europe, and elsewhere around the globe, a circumstance partly attributed to Musk playing the role of shadow dictator in the Oval Office. Last night Trump himself added fuel to the anti-Tesla fire when he took to social media with a pledge to buy a Tesla, which will somehow stop other people from not buying a Tesla.

Tesla’s brand reputation troubles are also not being helped by unforced errors involving Musk’s Starlink satellite venture. A branch of SpaceX, Starlink has has seen billions in lost contracts in recent days, reportedly as a direct result of Musk’s reckless use of social media, motivating clients to deal with the company’s competitors.

Regardless of the reason for the Tesla sales drop-off, the fact is that aspiring EV buyers also have options, and the same goes for energy storage. GM, for example, recently introduced a home energy storage system to go with its EV lineup.

Other energy storage innovators are also emerging to challenge Tesla in the utility-scale market, both in the BESS (battery energy storage system) field and in the more exotic area of long duration energy storage systems.

Boom Times For The US Solar Industry…

Turning now to the SEIA report, this won’t surprise anyone who follows the missives from the US Energy Information Agency. In February, EIA took note of the vigorous pace of solar industry activity last year and predicted a similar outcome for 2025.

The new SEIA report adds more nuance and a warning as well.

“The United States installed a record-breaking 50 gigawatts (GW) of new solar capacity in 2024, the largest single year of new capacity added to the grid by any energy technology in over two decades,” SEIA reported.

The calculation of 50 gigawatts comes from the U.S. Solar Market Insight 2024 Year in Review report, a product of SEIA and the firm Wood Mackenzie, which also attributes an impressive 84% of all new electricity generation capacity additions in the US to solar energy and energy storage, leaving just a shred of opportunity for natural gas and other fuels.

The reason for the strong performance is pretty obvious and it has nothing to do with saving the planet. Instead, bottom line considerations are at work. “Solar and storage can be built faster and more affordably than any other technology,” explains SEIA president and CEO Abigail Ross Hopper.

…But No Guarantees

So, why mess with success? Why not? After all, when you are the President of the United States and you have both houses of Congress and the Supreme Court in your pocket, you can do just about anything.

“Sudden changes to federal tax credits, supply chain availability, and permitting policy will create uncertainty for investors, increase costs for developers and manufacturers, and cause a slowdown in solar deployment,” SEIA warns.

The President and his followers have already established a path of uncertainty in just a matter of weeks. SEIA calculates that continuing down that path for into the future could result in a 130-gigawatt decline in solar deployment over the next 10 years, representing almost $250 billion of lost investment in the US economy.

Ouch! Trump already cost US investors and taxpayers billions when he single-handedly crashed the domestic offshore wind industry. The domestic solar industry is not quite as vulnerable because it does not rely on federal leases, but the pinch on federal and state solar energy policy could still do some damage.

“Last year’s record-level of installations was aided by several solar policies and credits within the Inflation Reduction Act that helped drive interest in the solar market,” explains Wood Mackenzie Principle Analyst Sylvia Levya Martinez.

“We still have many challenges ahead, including unprecedented load growth on the power grid. If many of these policies were eliminated or significantly altered, it would be very detrimental to the industry’s continued growth,” Martinez adds.

Red States Love The US Solar Industry, Or Not

In contrast to the doom and gloom, SEIA calculates that US solar capacity could grow to a total of 739 gigawatts by 2035, under the same predictable, reliable policy environment that held sway last year.

Under that environment, utility-scale deployments accounted for most of the 50-gigawatt record in 2024, growing by 33% compared to 2023 for a record total of 41.4 gigawatts. The community solar industry also set records with a 35% year-over-year growth rate. The commercial market still has some catching up to do but it still registered 8% growth.

The only dull spot was the residential solar market. “The residential solar market experienced its lowest year of installations since 2021 due to state-level policy changes and elevated interest rates nationally,” SEIA stated, though observing that the dip could be temporary.

So much for 2024. As for the future, SEIA notes that the solar industry is most active in the very states where legislators are working to put the brakes on solar development. Perhaps they believe it will be good for their state economies. And perhaps shooting oneself in the foot is not nearly as painful as it sounds. Either way, the economic outlook is not good for red states.

“Many of the fastest-growing solar states such as Texas, Indiana, and Florida would see the largest declines in deployment under the low-case scenario. Texas alone could lose out on over $50 billion of solar investment over the next decade,” SEIA notes.

Voters, it’s all up to you…

Photo (cropped): The US solar industry proved itself to be a leading economic engine once again in 2024, though the Trump-Musk wrecking ball and state-level policy changes could dim the outlook for the future (courtesy of US Department of Energy).