By Wilson Chang | CEO | Sunrock Distributed Generation
With the Trump administration returning for another term, the solar industry is entering a new chapter filled with both challenges and opportunities. This article explores the outlook for solar under the incoming administration, discussing how potential policy changes, including tariffs, support for domestic manufacturing, and the growing role of solar and battery storage for energy security in red states, could shape the sector’s future.
The solar industry has matured significantly since the last Trump administration, with distributed solar now the most competitively priced energy source in many parts of the United States. Despite potential policy headwinds, the sector’s fundamentals remain robust. Solar and storage technology continues its relentless march toward higher efficiency and lower costs, while retail energy prices are on an upward trajectory.
Now, with the Trump Administration coming in for a second term, the U.S. solar industry is on a far stronger footing than before. Solar panels are increasingly manufactured in the United States, and demand for power is increasing dramatically, driven by a digitizing world, electric vehicles, and Silicon Valley’s insatiable appetite to build ever more powerful and power-consuming AI.
This strong foundation is reflected in data from the Solar Energy Industries Association (SEIA), which reports that solar contributed 67% of all new electricity-generating capacity added to the U.S. grid in the first half of 2024. Domestic solar manufacturing, spurred by federal incentives, has quadrupled in recent years, positioning the U.S. to meet its solar deployment demand with American-made panels.
Unlocking American innovation
The Trump administration’s energy policies will diverge from its predecessor’s, with a focus on reshaping the IRA to align with Republican priorities. While some adjustments may reduce the IRA’s scope, the emphasis on domestic manufacturing and energy infrastructure development will likely persist. Energy security is national security.
The application of American ingenuity to solar panel manufacturing and technology will greatly benefit the solar industry. U.S. companies are some of the best in the world at R&D innovation. First Solar, a U.S. solar manufacturer, invested significantly in improving the performance of thin-film photovoltaic modules, and has at times surpassed a $20 billion market capitalization.
American technology innovation is capable of competing with the relentless cost-cutting approach of global competition, particularly as solar systems integrate storage and develop advanced microgrid and grid support capabilities.
Red states and the rise of solar jobs
Red states are rapidly emerging as leaders in solar and storage manufacturing and adoption, creating well-paid jobs that improve standards of living. Texas installed 5.5 GW of solar capacity in the first half of 2024, nearly double Florida’s 2.9 GW. This surge highlights solar’s role in energy security, especially as extreme weather events increasingly strain the power grid.
SEIA forecasts 39,000 new manufacturing jobs by 2033 due to federal policies, with many of these jobs landing in red states. The deployment of solar + battery storage systems in these regions is crucial for resilience against climate-related disasters.
As solar manufacturing and installations ramp up, the industry faces a critical challenge: a shortage of skilled labor. Qualified installers are in high demand, and the rapid evolution of technology and regulations complicates rapid workforce development.
Tariffs will drive continued retail energy inflation
Tariffs in the solar industry are not new — nor are they just a Republican economic lever. In 2012, the Obama administration imposed tariffs of roughly 36% on Chinese solar manufacturers, under anti-dumping and countervailing duty laws.
While tariffs can bolster domestic manufacturing, they also risk driving up retail energy costs for the consumer, particularly if tariffs are broadly applied. Past experience and empirical evidence suggest that consumers often bear the brunt of tariff-related price increases. As costs of imported electrical equipment are increased, utilities are not structured to decrease their margins. Their incentives are to pass along increases in retail energy rates to commercial, industrial and residential ratepayers.
In a rising retail energy rate environment, distributed solar systems are increasingly valuable assets, offering a cost-effective and resilient alternative. Even in the face of tariffs — a challenge the solar industry has navigated and thrived under for more than a decade — distributed solar remains a compelling solution, reinforcing its role as a key driver of energy independence and affordability.
Storage: The cornerstone of the distributed digital grid
The increasing frequency of extreme weather events such as Hurricane Helene’s devastation of Asheville, North Carolina, underscores the need for energy storage solutions. Helene caused catastrophic flooding, resulting in mudslides, power outages and a clean water supply crisis. Our EPC partners experienced it. Our technicians live there. Power from the traditional grid was out for more than two weeks for some residents. However, many of our customers with rooftop solar + battery systems never lost power. This resilience showcases how localized solar solutions can fortify communities against extreme weather and provide critical stabilization to the power grid.
The need for grid resiliency is also transforming the financial return of batteries by enabling decentralized storage assets to provide and be compensated for valuable grid services through virtual power plant (VPP) arrangements. This allows decentralized energy storage assets to be aggregated into a unified resource, enabling complex services like frequency regulation, peak load shaving, standby capacity, and electricity price arbitrage for asset owners.
Software eats the grid
By integrating software controls into our energy systems, advanced VPP platforms enable dynamic control and optimization of energy storage systems based on real-time grid conditions, demand forecasts, and energy market prices. These platforms provide more granular control over when and how stored energy is released, optimizing both financial returns and grid reliability.
The Rocky Mountain Institute estimates that by 2030, VPPs could account for 60 GW of peak demand in the United States. As battery technology improves and software capabilities expand, solar companies such as ours are transforming into technology-driven platforms utilizing software to optimize asset returns across large fleets of distributed assets.
2025: The solar industry’s year of resiliency
Uncertain energy policies, rising retail energy costs, and grid vulnerabilities are not just abstract challenges — these are issues impacting the local businesses and nonprofits that form the backbone of our communities. As the energy industry navigates policy shifts, an aging grid, and surging demand for power, clear opportunities are emerging in 2025 to redefine how energy is generated, stored, and used — starting at the local level.
Resiliency must be built locally and distributed broadly. Whether it’s a school reducing costs to invest in education or a local business reducing its carbon footprint while saving on costs, Sunrock and our partners are together bringing solar and storage solutions where they are needed most.
Wilson Chang is CEO of the solar+storage development and management platform, Sunrock Distributed Generation. Having spent his career investing in and starting clean energy and technology companies, Wilson was previously a Partner at Hudson Sustainable Group where he invested in climate tech companies and solar energy projects. He was also a co-founder of Sunlight Financial, a leading residential solar financing platform which went public on the New York Stock Exchange in 2021, and a co-founder of Sunstone Credit, a leading commercial solar financing platform.
Tags: distributed generation, Sunrock Distributed Generation
