SolarBank Thrives Amidst US Solar Market Slowdown in 2025

US Solar Market Slows in 2025 – Here’s How SolarBank (NASDAQ: SUUN) Is Still Gaining Ground

The US solar industry began the year 2025 with mixed signals. According to Wood Mackenzie’s US Solar Market Insight Q2 2025 report, the first quarter saw an addition of 10.8 gigawatts direct current (GWdc), representing a 7% decline from the previous year and a significant 43% drop from Q4 2024. Rising costs, trade tensions, and shifting policies have impacted project development and consumer demand. Let’s examine the performance of various solar segments in this quarter.

### Utility-Scale Solar: Slowing but Resilient

Utility-scale solar added 9 GWdc, slightly down from both the previous quarter and Q1 2024, yet it remains a strong segment. Texas led the way with 2.7 GWdc, nearly double that of Florida. Both states have heavily invested in large-scale solar projects. Notably, Texas, Florida, Ohio, Indiana, and California accounted for 65% of the utility-scale additions.

### Mixed Results Across Distributed Solar Segments

In the residential solar sector, growth has been stunted, with only 1,106 MWdc added—the lowest figure since Q3 2021. High interest rates, economic uncertainties, and doubts about solar tax credits have deterred homeowners from making the switch. California topped the list with 255 MWdc installed, marking the weakest output since Q3 2020. Conversely, commercial solar experienced a year-over-year increase of 4%, reaching 486 MWdc, primarily driven by California’s NEM 2.0 projects, despite a seasonal dip of 28% compared to Q4 2024.

### Community Solar: Facing Challenges but Holding Promise

Community solar projects, which involve shared local installations, contributed 244 MWdc in Q1 2025. This represents a sharp 22% decline year-over-year and a significant drop from the surge seen in Q4 2024. Maine and Massachusetts faced steep declines, while New York’s output fell slightly yet still accounted for over half of the national community solar market. Despite these challenges, the installed capacity for 2025 is expected to surpass 2023 levels, reaching approximately 1.5 GWdc. New York and Illinois are driving this growth, with a community solar pipeline nearing 5 GWdc. However, delays in grid interconnection and necessary infrastructure upgrades are hindering progress.

Emerging markets may help stimulate growth, as proposed legislation in various states could unlock over 1.5 GWdc of additional community solar capacity. Still, without new initiatives, national growth may stall. Wood Mackenzie predicts a 6% average annual decline in community solar through 2030, although future legislative successes could alter this trajectory.

### SolarBank’s Resilience and Growth

Amidst this uncertainty, SolarBank has shown resilience. The company recently announced a 2.4 MWdc community solar project in Nova Scotia, which is projected to generate approximately 2,730 MWh of clean energy annually, enough to power 221 homes and offset nearly 1,900 tons of CO₂. This ground-mounted community solar project, owned by AI Renewable Flow-Through Fund, marks a significant entry into Canada’s clean energy market. Following the announcement, SolarBank’s stock (NASDAQ: SUUN) rose to $1.82 on June 16, up from $1.415 on June 13, reflecting strong investor interest in clean energy opportunities, even as the broader market navigates policy and economic uncertainty.

SolarBank has developed over 100 MW of renewable energy projects in North America and boasts a pipeline of more than 1 GW. In the US, the company has completed over 50 MW of community solar installations and is now leveraging that experience in the Canadian market, where demand for clean energy is on the rise and government support is increasing.

### SolarBank’s Strategic Portfolio

SolarBank’s portfolio encompasses community solar, utility-scale systems, virtual net metering projects, and behind-the-meter installations. This diversity allows the company to remain agile, optimize returns, and foster low-risk, high-reward partnerships.

### Navigating Trade Policy Disruptions

The US solar market is currently grappling with a challenging trade and tariff environment in 2025. Earlier this year, a 25% tariff was imposed on imports from Canada and Mexico, effective March 4. While most solar panels are not sourced from these countries, critical components like inverters and trackers are, leading to increased production costs. Additionally, aluminum tariffs under Section 232 rose from 10% to 25%, eventually reaching 50% by June, further driving up the costs of modules and frames. Tariffs on Chinese goods also surged, hitting 145% at one point due to fentanyl-related measures, before being rolled back to 30% on May 12. These changes have rendered the solar market more expensive and unpredictable.

In Q1 2025, the US added 8.6 GW of new solar module manufacturing capacity, bringing the total to 51 GW. However, upstream production remains sluggish, with only one new domestic cell plant, ES Foundry’s 1 GW facility in South Carolina, launched this year, and no new developments in wafer or polysilicon production. Despite these turbulent times, SolarBank has demonstrated resilience through collaborations, such as a partnership with Qcells to utilize U.S.-manufactured solar modules, preparing for various future scenarios.

### Looking Ahead: Investor Confidence in SolarBank

Despite the hurdles, the US solar industry continues to play a pivotal role in the nation’s energy transition. In Q1 2025, solar accounted for 69% of all new power capacity added, underscoring its sustained dominance. With long-term demand growing from data centers and domestic manufacturing, the sector’s growth potential remains robust. To maintain this momentum, the industry requires stable policies, consistent investment, and improved solutions for grid connections and supply chain challenges.

The recent rebound in SolarBank’s stock reflects increasing investor confidence, suggesting that the company could be a viable long-term investment. While challenges persist in the near term, the outlook for solar remains promising, and astute investors are taking notice.