We have had many inquiries and questions about the state of solar energy in the U.S. in 2025. Between tariffs and the new federal administration, many believe solar is not a great option anymore, especially as the focus changes from sustainability to a looming recession.

However, we have seen an increased interest in onsite solar energy in 2025. Why?

Increasing Electricity Costs

Outside of the sustainability benefits provided by solar, installing solar can also have a significant financial benefit. If your facility produces its own electricity from solar, you are protected from any increases in electricity rates from the grid.

And that is exactly what we see happening across the United States. Electricity rates in some parts of the country are up 30%, with projections for more increases coming. The demand for power from data centers to support AI has been a primary driver in increasing electricity rates nationwide.

When electricity rates go up, the ROI and savings provided by onsite solar also increase. The financial case for installing onsite solar will be stronger in 2025, not weaker.

Possible Lapse in Federal Incentives

The passage of the Inflation Reduction Act increased the tax credit for installing solar from 26% to 30%. This 30% level is still in place and available until any changes are made at the federal level.

With the possibility of reducing (or even eliminating) this tax credit under the Trump Administration, those who were even moderately interested in solar are acting now to capture this incentive before it is changed or eliminated. 

To date, the Trump Administration’s focus has been on eliminating wind energy and Electric Vehicle (EV) incentives that were passed under the Biden Administration. There has been some pushback from many Republicans in Congress against eliminating all incentives. However, there is still a real threat to changes in federal solar incentives as the new administration rolls out its agenda.

Right now, these incentives are still in place, and companies are taking advantage of installing solar in 2025 to obtain current federal tax dollars for these projects.

Tariffs

Increases in U.S. tariffs on imported steel and other components that make up solar arrays would normally make solar energy unattractive.

However, tariffs on imported solar panels and components were already in place before the Trump Administration. So, any increase in overall tariffs will have a limited impact on the final cost of solar projects, except those involving carports (which require more steel to construct).

In addition, because of these tariffs, companies’ overall operating costs are going up, and they are looking for ways to reduce costs. 

Enter solar. 

So, these tariffs have increased the value that onsite solar can bring to companies rather than decreasing it.

Conclusion

While political rhetoric at the federal level has mostly been negative on anything “green,” interest in solar energy has increased in 2025 due to the reasons listed above. Companies and public institutions that are even remotely interested in solar should at least be looking now, as the window to take advantage of the benefits of solar is certainly still open.  However, increased demand typically also means increased pricing, so being proactive is a good strategy.

Are you interested in a free third-party assessment of solar for your facility? Email our solar expert, Aaron Raftery, to get started.