The beginning of 2025 has been a somewhat bumpy period for renewable energy. On the first day of his new administration, Donald Trump signed an executive order declaring a “national energy emergency” and pledged his intent to accelerate fossil fuel production and undo major parts of the Inflation Reduction Act promoting renewable energy. What might that mean for the solar power industry this year?
While this is certainly a major shift in American policy, the truth is that solar power isn’t going anywhere. If anything, there’s an argument to be made that now is the best possible time to begin your solar project. Here are three reasons why.
Renewable Energy Already Outpaces Coal Energy
The renewable energy market required considerable government investment in its early stages to be competitive with fossil fuel production. But these days, as prices continue to drop, renewable energy sources are becoming more and more competitive with fossil fuels. Last year, for the first time in history, solar and wind combined to produce more energy than coal-fired power plants in the U.S.
As we look to the future, there’s little indication that the increase in renewable energy is going anywhere. Last year was a banner year for solar power, accounting for two-thirds of all new capacity on the U.S. grid. S&P has forecasted that the trend will continue in 2025, with the United States projected to install 45,000MW of new solar power.
In short, solar has become a mature industry capable of competing on its own, which may very well make it less susceptible to changes in overall U.S. energy policy.
Power Purchase Agreements Remain Popular
Solar Power Purchase Agreements (PPAs) have been a particularly popular solution for institutional clients like local municipalities and schools. Under this arrangement, the client partners with a solar developer to install solar infrastructure and then agrees to purchase the power generated from the system.
PPAs are an efficient and affordable way for institutions to make the switch to solar power, and according to a recent analysis by Enervus Intelligence Research, the cost of this kind of project is expected to decrease as early as 2026. Why? The large number of solar projects currently in development mean that it’s a buyer’s market for solar energy— and there’s arguably no better time to make the shift.
Take Advantage of the Current Policy Landscape
It’s impossible to predict the future of U.S. energy policy. We don’t yet know exactly how renewable energy projects will be affected by new Trump administration regulations.
But here’s what we do know: The generous incentives in the Inflation Reduction Act are still in force. That means that it’s possible to qualify for a 30 percent baseline tax credit for solar projects — and even higher tax credits if certain criteria are met. Now is the time to capitalize on these tax incentives, which won’t last forever.
The Durability of Solar Energy
The fact remains that solar energy is on an upward trajectory. With the technology’s many benefits, and continually dropping prices, there is every reason to believe that solar power’s ascendancy will continue in the years to come — no matter what types of regulations or policies are coming from Washington, D.C.
Our team at BAI continues to monitor federal and state trends in the energy sector. If you’re considering going solar in 2025, our team is happy to discuss the latest regulatory or political developments for your project. Don’t hesitate to get in touch with us for a conversation.