Solar Market Growth Slows Amid Subsidy Cuts and Saturation
The solar energy boom in the US and Europe shows signs of fading, though capacity additions remain historically high. During peak sunlight months, oversupply occasionally drives power prices into negative territory. Solar Power Europe projects 64.2 gigawatts of new capacity in 2025, diverging from BloombergNEF's more conservative outlook.
Residential installations are declining most sharply. The combination of falling module costs, generous subsidies, and high electricity prices once fueled a rooftop solar rush. Now, market saturation has led governments to roll back support as wholesale power prices retreat from post-Ukraine war peaks.
Utility-scale solar farms continue expanding but face headwinds as corporate power purchase agreements dwindle. This trend may force greater dependence on public financing to maintain growth trajectories.
US subsidy reductions are creating uncertainty across renewable energy projects. Singapore's Bila Solar has paused an Indiana facility expansion, while Canada's Heliene reevaluates plans for a Minnesota solar cell plant. Norway's NorSun weighs whether to proceed with a silicon wafer factory in Oklahoma.
