After a record year for installations in 2024, community solar dropped 36% year-over-year for the first half of 2025, said a report from Wood Mackenzie and the Coalition for Community Solar Access. The industry installed about 437 MW in the first half of 2025.
After passage of the One Big Beautiful Bill Act, which gutted project-based tax incentives for clean energy projects, Wood Mackenzie trimmed its five-year installation outlook for community solar by 8%.
(Read: “How the One Big Beautiful Bill impacts community solar”)
The bill has fundamentally altered the long-term market landscape, while slowing growth in mature markets like New York, which is contributing to an expected 29% contraction of the market nationwide by the end of the year,” said Wood Mackenzie.
Over a longer time horizon, the bill impacts get worse. Wood Mackenize expects installed community solar to contract 12% annually though 2030.
Community solar installations currently total 9.1 GW and are projected to exceed 16 GW by 2030. Wood Mackenzie’s high case projection, based on favorable state policy, would lift this by another 1.3 GW, while its low case, due to tax credit complications, would trim the ten year outlook by 1.2 GW.
“The final bill offers a crucial four-year window for projects already under development to come online and secure the Investment Tax Credit (ITC), supporting near-term buildout,” said Caitlin Connelly, senior analyst, Wood Mackenzie. “As of mid-2025, there are over 9 GWdc of community solar projects under development, with over 1.4 GWdc known to be under construction.”
Wood Mackenzie attributed this year’s retraction to decline in volumes in New York and in Maine, where the current program was recently overhauled. It also noted that Maryland, Massachusetts and New Jersey remain stalled in transitions between program iterations. It said that states have generally struggled to pass new community solar legislation this year.
“The early expiration of the ITC will only add to this difficulty given the window for any new projects to secure tax credits is so small,” said Connelly. “The passage of legislation in new markets could potentially add upwards of 1.1 GWdc through 2030.”
Jeff Cramer, president and chief executive officer of the Coalition for Community Solar Access said states are still showing dedication to expanding the market.
“Customer demand for community solar has never been stronger, and we’re seeing states step up with historic expansions like New Jersey’s 3,000 MW and Massachusetts’ 900 MW,” said Cramer.
Despite state support, Cramer noted that federal uncertainty, interconnection delays and program caps remain barriers to growth.
The report noted that acquisition costs eased a little in H1 2025, declining 5% on average across all customer segments from H2 2025. The complexity of customer acquisition has been an ongoing challenge for the segment.
Corporate demand for community solar remains high, said Wood Mackenzie, driving the commercial sector’s share of community solar capacity to about 53%.
However, developers and subscription management companies face increased headwinds in subscribing low-to-moderate income customers, said Wood Mackenzie. Challenging subscriber acquisition dynamics lowered the share of community solar capacity serving low-to-moderate income subscribers to only 9%. The customer segment remains the costliest to subscribe at $102 per kW compared to $72 per kW for non-LMI residential customers, said the report.
Despite the trimmed outlook for program-bases community solar programs, Wood Mackenzie said utilities are showing receptivity to distributed projects.
“Non-residential distributed solar, which typically encompasses projects sized between 2-20 MWdc, is extremely well-positioned for growth,” said Connelly. “Utilities are increasingly appreciating the value of community-scale resources because they can be deployed quickly, with storage, and close to customer load.”
(Also read: Community solar makes subtle gains in capacity, but bold moves in policy across the U.S.)
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