Every year, Earth Day arrives as a reminder to take a long look around and take stock of our planet’s health and future. And while it arrives every year at the height of spring’s flowerings, you’ll need rose-colored glasses to enjoy the view this year.

Even as the U.S. makes great strides in deploying record amounts of new renewable capacity, national clean energy goals and carbon emissions targets set over the last few years – a 61 to 66 percent decrease in carbon emissions from 2005 levels by 2035, and a carbon-free electricity grid by the same year – appear increasingly ambitious, and potentially out of reach.

With many other forms of renewable energy still cost-prohibitive or unready to scale up from the R&D and pilot stage, solar has led the energy transition and given lawmakers the confidence to establish those lofty goals. 

With many other forms of renewable energy still cost-prohibitive or unready to scale up from the R&D and pilot stage, solar has led the energy transition and given lawmakers the confidence to establish those lofty goals. Its health and growth, therefore, will have an outsized impact on whether those targets remain feasible, and whether next Earth Day brings reason for hope.

The Policy Landscape

As one of his first acts in office, President Trump withdrew the U.S. from the Paris Climate Agreement. Since his re-election, the solar industry has watched anxiously as lawmakers weigh cuts to the roughly $271 billion in tax incentives established by the Inflation Reduction Act.

Those IRA incentives drove the solar boom in recent years, giving renewable energy advocates so much to cheer for last year’s Earth Day. In April 2024, the industry could look back on the record amount of solar capacity installed in 2023 and ahead to the unprecedented re-shoring of solar manufacturing that would bring roughly 50 GW of module assembly plants online by the end of the year.

A blog post from the Solar Energy Industries Association (SEIA) on Earth Day 2024 strikes the tone of an industry finally coming into its own: “This year, for the first time ever, Americans are celebrating Earth Day with a comprehensive clean energy plan in place,” the trade group wrote. “The U.S. solar and storage industry is growing, and America’s ambitious clean energy goals are finally within reach.”

That outlook seems ill-fated in retrospect. But it wasn’t the whole story at the time, either. Even before Trump’s re-election, new headwinds were whipping up that could sweep the Biden Administration’s clean energy goals out of reach.

As more and more projects look to produce power, interconnection queues for regional grids have clogged up, bogged down by study delays and a lack of suitable transmission to carry new electricity to population centers. Renewable energy has also become a partisan issue for many, and a political lightning rod. The same public hostility that made offshore and onshore wind a target for the Trump administration routinely tangles the local permitting process for solar farms and ties development teams up in lawsuits.

And while the IRA has wooed module assembly plants back to the states, it has failed to do so in meaningful numbers for upstream components like polysilicon, wafers and cells, a disparity the Biden administration attempted to address up until Trump took office.

Reasons for Optimism

Despite those accumulating issues and the bunker mentality of the moment, there’s reason to believe solar can survive, and even thrive, without a helping hand.

The passage of the IRA under Biden in 2022 may have supercharged solar’s growth, but the momentum was already underway. In fact, during Trump’s first term, total installed solar capacity grew 128%, according to SEIA. With no fuel inputs needed, solar every year becomes more cost competitive, and often more affordable, compared to traditional forms of electricity generation.

Paired solar and storage projects have now become a standard development model as the price of batteries falls, and the EIA expects battery storage to have a banner year.

The solar industry globally is driven by fierce commercial competition, outpacing itself annually with technological advancements and new levels of efficiency. Chief among its areas of focus are batteries, which help balance the energy load and are critical to the promise of solar, as they allow grid operators to dispatch energy even when the sun is not shining. While a solar farm alone can not take the place of a natural gas plant, which can fire up at a moment’s notice at any time of day, a solar and storage facility is a true substitute. Paired solar and storage projects have now become a standard development model as the price of batteries falls, and the Energy Information Administration (EIA) expects battery storage to have a banner year, with a record 18.2 GW of utility scale storage anticipated to come online in 2025.

Even with the pervasive mood of uncertainty, new solar capacity will come online this year in great droves. New power generation in general is expected to jump from the 48.6 GW installed last year to 63 GW this year, the greatest jump since 2002, and utility scale solar will represent more than half, according to the EIA. The agency expects the utility sector to boost its installations in 2025 to 32 GW, up from 30 GW last year. Solar and storage together will account for some 81% of the new power joining American grids this year.

And, in another bright spot on the horizon, solar manufacturers have slowly begun announcing plans again for new American module plants, as well as upstream components, after a few months of disconcerted silence.

Trade and Price Outlook

Owing to nearly a decade-and-a-half of trade investigations and tariffs, starting under President Obama, American solar developers are locked out of the bargain barrel solar module prices available to the rest of the world from China. (FOB China: $0.088/wp, DDP US: $0.256/wp) Even still, the price per watt of solar modules has steadily ticked down, from the mid-40 cents per watt just three years ago.

The most recent anti-dumping/countervailing duties probe, started last April, has scrutinized suppliers in Vietnam, Malaysia, Thailand and Cambodia, significantly re-shaping the global supply chain in the process. The average cost per watt for American customers buying from those four countries was around 28 cents in the fall. But the nearly year-long investigation gave Chinese suppliers ample time to pack up and relocate to Laos and Indonesia. The average U.S. solar customer can now expect to pay 21 to 24 cents per watt for utility scale modules from Laos or Indonesia.

The tariff-and-relocation cycle has been referred to as whac-a-mole, and the game is likely to continue in some form or another. However, as of the end of 2024, the U.S. now has enough nameplate capacity to cover its own annual installation needs, and factories in the U.S. are trying to compete on price, to the extent that’s possible, offering prices in the high .20s and mid .30s ($0.26-$0.35/wp), and emphasizing their modules’ lack of tariff and detention risk.

President Trump announced a 10% general tariff on imports and steep country-specific ‘reciprocal’ tariffs on April 2, 2025, only to backtrack a week later, pausing the reciprocal tariffs on all countries except China for 90 days. Countries in Southeast Asia with significant solar manufacturing capacity saw some of the harshest rates – Laos (48%), Indonesia (32%), India (26%) – and the widespread confusion and panic that followed their initial announcement hints at what could follow if the tariffs are reinstated over the summer. While the tariffs look like good news at first blush for U.S. assemblers, their continued reliance on Southeast Asia for cells means prices for American modules would rise, as well. Trump’s executive order included exemptions for “energy” products, including polysilicon and wafers, but modules and cells did not make the cut.

Save for China, the U.S. consumes more energy and installs more solar power than every other country on Earth, adding heft and import to every change in direction for the country’s energy and trade policy. Neither has ever been more in flux. OPIS recently launched a policy tracker, which will be published monthly, to help follow the twists and turns of the new administration as it charts a new course towards “Unleashing American Energy.” Through the tracker, which will also follow EU policy, OPIS aims to elucidate what those changes mean for the solar market. It remains to be seen what they will mean for Planet Earth.