After a record-breaking 12 months in 2024, the U.S. group photo voltaic market slowed within the first half of 2025, with installations declining 36% year-over-year, leading to 437 MWDC of recent capability put in, in keeping with a brand new report launched by Wood Mackenzie in collaboration with the Coalition for Community Solar Access (CCSA).
As a result of passage of HR1 and associated federal coverage adjustments, Wooden Mackenzie’s cumulative five-year group photo voltaic outlook decreased by 8% in comparison with the outlook printed in Q2 2025. HR1 has essentially altered the long-term market panorama, whereas slowing development in mature markets, notably New York’s group photo voltaic program, is contributing to an anticipated 29% nationwide contraction in 2025.
“General, we count on nationwide put in group photo voltaic capability will contract by a median of 12% yearly via 2030,” mentioned Caitlin Connelly, senior analyst and lead writer of the report. “The ultimate invoice gives a vital four-year window for tasks already underneath growth to come back on-line and safe the investment tax credit (ITC), supporting near-term buildout. As of mid-2025, there are over 9 GWDC of group photo voltaic tasks underneath growth, with over 1.4 GWDC identified to be underneath development.”
Credit score: Wooden Mackenzie
Progress in rising markets slows and new markets face challenges
In accordance with the report, the market contraction within the first half of 2025 is primarily pushed by steep declines in volumes in New York and in Maine, the place the present program was not too long ago overhauled. Applications in some state markets are near or at capability, and a number of other packages in states together with Maryland, Massachusetts and New Jersey stay stalled in transitions between program iterations.
“The early expiration of the ITC will solely add to this problem given the window for any new tasks to safe tax credit is so small,” Connelly mentioned. “The passage of laws in new markets might doubtlessly add upwards of 1.1 GWDC via 2030.”
New state markets might deliver extra capability to the market, however there was restricted success in passing group photo voltaic program laws thus far this 12 months.
“Buyer demand for group photo voltaic has by no means been stronger, and we’re seeing states step up with historic expansions like New Jersey’s 3,000 MW and Massachusetts’ 900 MW,” mentioned Jeff Cramer, president and CEO of CCSA. “These vibrant spots present what’s doable when policymakers work to unlock capability. On the identical time, this report makes clear the challenges forward — from federal uncertainty to interconnection delays and program caps — that should be addressed to appreciate the complete potential of group photo voltaic and ship the resilient, reasonably priced energy communities are asking for.”
Subscriber acquisition prices declined in H1 2025, however LMI market challenges persist
Credit score: Ampion
Subscriber acquisition prices decreased 5% from the second half of 2024 on common throughout all buyer segments. Company demand for group photo voltaic stays excessive, driving up business photo voltaic’s share of whole group photo voltaic capability to 53%. Nonetheless, builders and subscription administration corporations face elevated headwinds in subscribing low-to-moderate earnings (LMI) prospects. Troublesome subscriber acquisition dynamics lowered the share of group photo voltaic capability serving LMI subscribers to 9%. The client phase stays the most costly to subscribe at $102/kW in comparison with $72/kW for non-LMI residential prospects.
As new group photo voltaic packages battle to take off, group photo voltaic builders more and more goal various distributed photo voltaic packages as pathways for long-term development.
“Non-residential distributed photo voltaic, which usually encompasses tasks sized between 2 to twenty MWDC, is extraordinarily well-positioned for development,” Connelly mentioned. “Utilities are more and more appreciating the worth of community-scale sources as a result of they are often deployed shortly, with storage and near buyer load.”
Cumulative group photo voltaic installations at present whole 9.1 GWDC and are projected to exceed 16 GWDC by 2030. Wooden Mackenzie has developed high- and low-case eventualities to explain market uncertainties:
- Excessive case: An 18% uplift to the five-year outlook via favorable state coverage adjustments and environment friendly interconnection reform, including 1.3 GWDC
- Low case: A 16% contraction as a result of complicated tax credit score qualification pointers and restricted state intervention, decreasing outlook by 1.2 GWDC
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