The U.S. is projected to add 502 gigawatts (GW, DC) of utility-scale and distributed solar capacity over the next decade, sustaining annual installations between 41–50 GW from 2025–2035, according to a revised forecast by Wood Mackenzie released in partnership with the Solar Energy Industries Association (SEIA) in March 2025. The outlook, which builds on 2024’s record 50 GW of new solar additions, would lift cumulative U.S. capacity to approximately 740 GW by 2030—a 215% surge from 2024 levels.
However, Wood Mackenzie cautioned that achieving this target hinges on the longevity of the Inflation Reduction Act (IRA) and the stability of its incentives. Key risks include:
- Exponential Power Demand Growth: Driven by AI and data centers, projected to double U.S. electricity consumption by 2035.
- Gas Turbine Shortages: Expected by 2029 as thermal plant retirements outpace replacements.
- Trade Policy Volatility: Rising tariffs and geopolitical tensions, particularly with China’s solar supply chain.
- IRA Tax Credit Phase-Downs: Potential reductions in the 30% Investment Tax Credit (ITC) beyond 2032.
Sylvia Leyva Martinez, Wood Mackenzie’s principal analyst for North American utility-scale solar, underscored the binary outlook: “Under a bullish scenario, installations could exceed our base case by 24%, reaching 55 GW annually. Conversely, a bearish scenario—triggered by IRA rollbacks or trade wars—could shrink growth by 25%.”
Despite headwinds, Martinez highlighted “unprecedented” domestic manufacturing momentum. U.S. solar module production capacity is forecast to skyrocket from 17 GW in 2023 to 144 GW by 2027, with parallel expansions in wafer and cell fabrication. “The IRA has catalyzed 60 billion in announced manufacturing investments,” shenoted, citing FirstSolar’s 1.2 billion Alabama plant and Qcells’ $2.5 billion Georgia hub.
Yet, Martinez warned that “policy whiplash” threatens this progress. “Investors demand 10-year visibility on tax credits, but Congress’s failure to extend IRA provisions beyond 2032 creates cliff risks,” she said. Additionally, grid interconnection delays—averaging 3.5 years for projects—and labor shortages could further stymie deployment.
The SEIA-Wood Mackenzie report urges policymakers to “lock in” IRA incentives and streamline permitting. “Solar is now America’s cheapest new power source, but without regulatory certainty, we risk ceding leadership to Europe and Asia,” Martinez concluded.
