Why the US Solar Market Will Continue to Grow No Matter the Outcome of the Presidential Election

The outcome of November's presidential election could significantly shape U.S. climate policy, especially as solar and storage deployment experiences unprecedented growth. In the second quarter of this year, the U.S. installed a record 9.4 GW of solar power, building on an even larger 11.8 GW in the first quarter, primarily driven by utility-scale projects, according to the Solar Energy Industry Association (SEIA) and Wood Mackenzie.

Republican candidate Donald Trump has vowed to eliminate regulations on carbon emissions set by the Biden administration, withdraw the U.S. from the Paris Agreement, and encourage the construction of new power plants without clarifying their types. He has indicated intentions to "rescind all unspent funds" from the 2022 Inflation Reduction Act (IRA), targeting green policies introduced under Biden.

The IRA includes substantial tax credits for clean energy, which have accelerated solar and storage deployment across the country. While Trump claims to support solar energy, any changes to the IRA would require Congressional approval. Vice President Kamala Harris has expressed pride in the Biden administration’s clean energy achievements, emphasizing the IRA’s success and advocating for incentives to enhance transmission networks for solar and wind.

Despite concerns about negative rhetoric on clean energy from Republican leaders, Jim Murphy, President and COO of clean power developer Invenergy, pointed out that many Republican representatives hail from areas benefiting from new solar projects and clean tech manufacturing jobs. “The IRA has driven investment and job growth in both red and blue states, with perhaps a greater impact in red states,” Murphy noted.

The U.S. solar sector added over 18,000 jobs in 2023, reflecting a growth rate of 5.3%, the fastest in the energy industry, as reported by the Department of Energy (DOE). Since the IRA was enacted, solar and storage deployment has surged, with domestic module manufacturing capacity increasing from 8 GW to 31 GW. Invenergy utilized IRA incentives to establish one of the largest solar panel manufacturing facilities in Ohio.

Investment in clean power and grid infrastructure is expected to continue in the short to medium term, regardless of the election outcome, according to Ed Hirs, an Energy Fellow at the University of Houston. He emphasized that IRA incentives are already integrated into ongoing projects, suggesting that a Trump presidency wouldn’t hinder progress.

The IRA provides tax credits for clean power initiatives, including bonus credits for projects utilizing American-made materials or located in low-income areas or those affected by the energy transition. It also supports clean tech manufacturing and has established a transferable tax credit market, stimulating private investment.

The long-term future of IRA incentives is closely tied to the results of congressional races alongside the presidential election. With 33 Senate seats and the entire House of Representatives up for grabs, the outcome will shape the IRA's trajectory. If Democrats maintain control, the IRA's incentives may not only persist but could expand. Conversely, a Republican majority could lead to more conservative approaches, influenced by members' willingness to forgo IRA funding in their districts.

While some Republican lawmakers have expressed discontent with how the IRA was passed without their support, many recognize the positive impacts on job creation and economic development in their states. Even if certain IRA provisions were rolled back, the overall impact on solar energy might be minimal, according to Hannan Parvizian, CEO of Exowatt. He noted that while the IRA is beneficial, renewables will likely continue to deploy regardless.

Both the Biden and Trump administrations have raised import tariffs on solar products, with the Biden administration expected to maintain this stance. Trump has suggested increasing tariffs on imports, particularly from China, emphasizing the need to reduce reliance on Chinese supply chains.

Significant investments in grid infrastructure are necessary to connect solar and wind energy from remote areas to major load centers. However, delays in permitting and grid connections pose challenges for clean tech developers, exacerbated by an influx of applications leading to approval backlogs. The Federal Energy Regulatory Commission (FERC) has made efforts to expedite the approval process, but these changes will take time to materialize.

There is bipartisan support for a permitting bill introduced by Senators Joe Manchin and John Barrasso, aimed at speeding up the approval process for power transmission and energy projects. The exact requirements for passage remain uncertain.

As the Biden administration emphasizes permitting reforms to accelerate clean energy deployment, including streamlined processes and expanded federal development zones, a potential Harris administration would likely continue these initiatives. In contrast, a Trump administration might focus on expediting permits for fossil fuel projects by loosening environmental regulations.