Community Solar Growth Stalls After Record Year
2024 was a record-breaking year for community solar. But in 2025, the numbers were far less impressive. Most of the momentum was lost, primarily due to the expiration of legislation, state market capacity limits, policy barriers, and deteriorating access for low- to moderate-income households.
Explore more about community solar’s shifting market outlook and how you can still access solar even if it’s not available to you on a broader scale.
Record 2024 Meets Sharp Decline in 2025
The solar energy market as a whole is still growing in the US, but the community solar subsection is faring quite differently as of this year. 2024 marked an all-time high, with 1.7 gigawatts of installed capacity.
While the full numbers for 2025 are not yet available, the first half of the year saw just 437 MW installed (compared to 683 MW in the first half of 2024), marking a 36% year-over-year decline.
Projections indicate an average annual decline of 12% is expected through 2030 if this trend continues.
Federal Policy Upends Market Trajectory
When the One Big Beautiful Bill Act (OBBBA) was signed, it fundamentally altered the long-term market landscape for community solar. It shortened the deadlines for the 48E ITC tax credits to qualify for new projects, creating a nearer end for the credits that make large community solar installations viable.
It was previously set to expire in 2034. To put this in perspective, the policy provides 30-50% of project costs, so new projects will become more expensive, and projects already underway will likely slow down.
Another initiative, the Greenhouse Gas Reduction Fund, was also targeted by the bill. The bill eliminated a significant source of low-cost capital for clean energy projects. Low-income communities are feeling this especially hard.
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Tight Construction Deadlines
The new law in OBBBA requires projects to begin construction no later than July 4, 2026, with the projects completed within four years. Alternatively, projects must be placed in service by the end of 2027 to qualify for the credits. This narrow timeline is increasing urgency and turning these large-scale construction projects into a race against the new deadline.
Federal Clawbacks
In August, the EPA terminated the $7 billion Solar for All grant program and is attempting to claw back previously awarded funds designed for residential and community solar projects for disadvantaged communities throughout the U.S.
Though it triggered several lawsuits against the federal government, no resolution has been found. Most recently, a federal appeals court panel in DC backed the EPA’s right to proceed with the clawback.
Mature Markets Hit Growth Ceiling While Emerging Markets Struggle
Mature markets that once were adding new community solar projects left and right have since slowed down, facing scarcity for new sites, grid connection delays, and mounting land and permitting costs.
Roadblocks Hit: New York, Maine, Virginia, New Mexico
Solar energy saw significant progress and high use in places like New York, Maine, Virginia, and New Mexico. However, this progress has now paused due to numerous obstacles.
New York’s site scarcity is driving up land costs, and permitting and project development costs are both getting more expensive. The average wait time for these arrays to get interconnected to the NYISO grid is 7.4 years, creating long stalls.
In Maine, their record 2024 growth was shattered by regulatory changes as developers rushed projects to completion before net metering was phased out. Other issues include new fees added for both new and established projects, as well as a June 2025 legislation that retroactively overhauled compensation for existing projects.
Trouble Getting Started: New Legislation and Political Red Tape
While mature markets hit their own glass ceilings, other states have had trouble getting started at all. Only 24 states plus D.C. currently have community solar legislation as of February 2025, and there hasn’t been much success in passing new programs this year.
There’s still been some movement on the front, though. Wisconsin, Michigan, Iowa, and Ohio are considering shared-solar bills. The Montana legislature recently approved a new program, only to be vetoed by Governor Greg Gianforte due to concerns about “unreasonable costs” to other customers.
Getting community solar over the legislative finish line remains challenging, and it will require a bipartisan approach and effective execution if we want to see more progress made.
The Challenges of Low-to-Moderate Income Access
Independent residential systems are more efficient and affordable than ever, thanks to tax incentives from the Inflation Reduction Act, state and local rebates, and other financial programs that haven’t been negatively impacted yet. However, community solar is more difficult for those with low-to-moderate incomes to access due to the numerous program cuts from the OBBBA.
For most of these people, it makes more sense to invest in something that meets their home’s needs, like a whole-home generator. As long as they have room on their roof, yard, or even on an apartment balcony, they can set up an array of panels like the EcoFlow 400W Rigid Solar Panels. The battery component is small enough to fit in even the closest of quarters, making it a space-efficient option without the need for large, community-sized arrays.
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Frequently Asked Questions
What Is the Downside to Community Solar?
Community solar is not without its downsides. The savings are limited compared to the direct savings seen when you own your own panels and battery. You also have less control and flexibility over the system and may not be able to claim tax credits.
What Is the Growth Rate of Community Solar?
The growth rate of community solar slowed significantly after a record 2024. It’s negative for 2024 after installations fell by 36% in the first half of the year compared to the same period last year. The decline is directly tied to policy changes and the subsequent market adjustments.
Final Thoughts
Community solar is facing significant challenges at both the federal and state levels. While we hope for a more favorable environment for community solar growth to come, the best thing you can do for yourself now is find ways to harness renewable energy on a smaller scale for your family.
The EcoFlow DELTA Pro 3 Solar Generator (PV400W) is an alternative to community solar if it’s not available in your area, to ensure your home’s needs are covered. You can claim tax credits to reduce the upfront cost, and then, once installed, all the savings you enjoy from minimizing your grid reliance are yours to keep.