Short Answer
Both the model and the market overwhelmingly agree that at least 30 GWdc of solar capacity will be installed in the US in 2025, with only minor residual uncertainty.
1. Executive Verdict
- FEOC rules significantly delayed utility-scale solar projects in Q4 2025.
- 8,200 MW utility-scale solar awaited commercial operation by Dec 2025.
- U.S. residential solar experienced significant contraction in 2025.
- IRA continues driving strong long-term solar deployment.
- EIA solar capacity data often undergoes upward revisions.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| At least 50 GWdc | 28% | 27% | Market higher by 1.0pp |
| At least 40 GWdc | 93% | 90.5% | Market higher by 2.5pp |
| At least 60 GWdc | 7% | 0.1% | The Grade B evidence, primarily the sustained solar installation momentum surpassing wind capacity, justifies a significant +1.0 logit-shift, which counters the market's baseline pessimism anchored in valid but likely overweighted fears of FEOC compliance and regulatory headwinds. |
| At least 30 GWdc | 1% | 98.5% | Model higher by 97.5pp |
| At least 70 GWdc | 7% | 4.5% | Market higher by 2.5pp |
Current Context
US solar capacity showed strong growth, surpassing wind in 2025. As of February 4, 2026, utility-scale solar capacity officially exceeded wind capacity in the US, reaching 163.4 GW by November 2025 compared to wind's 160.9 GW. Solar was the leading source of new generating capacity for 27 consecutive months through November 2025, contributing 72.1% of all new capacity during this period, and 88% when combined with wind. The US solar industry installed over 30 GW of new capacity through the third quarter of 2025. Q3 2025 alone saw 11.7 GWdc installed, marking a 20% increase from Q3 2024 and a 49% increase from Q2 2025, making it the third-largest deployment quarter in the industry's history. Quarterly installations for 2025 were 10.8 GWdc in Q1, 7.5 GWdc in Q2 (a 24% decline from Q2 2024), and 11.7 GWdc in Q3. Utility-scale solar capacity increased by 22,237.2 MW and small-scale solar by 5,460.5 MW between January 1 and November 30, 2025. Domestically, US solar module manufacturing capacity expanded by 4.7 GW in Q3 2025, bringing the total to 60.1 GW. North American solar Power Purchase Agreement (PPA) prices rose by 3.2% between Q3 and Q4 2025, reaching US$61.67/MWh, a 9% increase over 2025. LG Energy Solution reported increased operating profit in 2025, driven by its position as a major domestic supplier of lithium iron phosphate (LFP) cells for the US battery energy storage system (BESS) sector, with plans to ramp up ESS cell production to over 60 GWh by the end of 2026.
Future solar growth depends on policy, despite optimistic forecasts. The U.S. Energy Information Administration (EIA) projected 33 GW of new solar generating capacity in 2025, representing half of all new electricity capacity. BloombergNEF revised its 2025 global solar PV addition forecast to 698 GWdc, with the US expected to contribute 54 GWdc. Experts like Abigail Ross Hopper (SEIA CEO) emphasize solar and storage dominance with American-made equipment. Analysts from Wood Mackenzie, such as Sylbia Leyva Martinez and Zoë Gaston, suggest US solar additions could average 40-50 GW annually, but warn that growth might flatten or decline through 2028, with policy outcomes being a significant variable. Jenny Chase, Lead Solar Analyst at BloombergNEF, was optimistic about global solar growth in 2025, aligning with their US forecast of 54 GWdc. Dallas Fed economists Cameron Barrett, Kunal Patel, and Michael Plante observed that Texas added as much solar capacity in 2025 as in 2024 despite a less supportive federal policy environment, contrasting with slowdowns in many other states. The "One Big Beautiful Bill Act" (OBBBA), enacted in July 2025, significantly altered future tax credit eligibility, requiring projects to commence construction by July 4, 2026, or be operational by the end of 2027 to qualify for the 45E Investment Tax Credit (ITC) or 45Y Production Tax Credit (PTC). The OBBBA also eliminated the residential solar Investment Tax Credit (Section 25D ITC) after 2025, a faster phase-out than anticipated. Starting in 2026, new projects must satisfy specific sourcing requirements for equipment and materials to qualify for tax credits.
Policy uncertainty, tariffs, and economic factors pose significant challenges. A central concern is the "dramatic shift" in federal solar policy, including the potential for Inflation Reduction Act (IRA) rollbacks or changes to tax credit provisions, combined with the OBBBA's shortened eligibility timelines, creating substantial market uncertainty. New and modified tariffs on imported solar components, such as Section 201, Section 301, AD/CVD duties, and universal tariffs, along with "Foreign Entities of Concern" (FEOC) restrictions, are increasing costs, reshaping supply chains, and potentially impacting tax credits. High interest rates continue to impede financing for capital-intensive projects, particularly affecting residential and community solar segments by limiting consumer borrowing and demand, and contributed to lower installation volumes in Q2 2025 due to several bankruptcies of major residential solar companies. Permitting challenges, especially for utility-scale projects on federal lands, remain a significant hurdle causing project delays. Despite increasing US solar module manufacturing capacity, the industry largely relies on imported wafers and cells, raising concerns about the domestic supply chain's ability to meet demand and new sourcing requirements. Equipment constraints also hindered installation growth in the residential segment. Additionally, the rapid expansion of solar capacity necessitates ongoing discussions around grid infrastructure, transmission planning, and market incentives to ensure smooth integration.
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This prediction market has demonstrated a clear, long-term upward trend, with the implied probability of installing at least 50 GWdc of solar in 2025 rising from a starting point of 17.0% to its current level of 28.0%. Despite this overall bullish trajectory, the market experienced extreme volatility in late January 2026 as traders reacted to conflicting data releases. A significant price spike of 13.0 percentage points occurred on January 16, driven by an initially positive interpretation of the EIA's Short-Term Energy Outlook, which projected strong solar growth. This optimism was short-lived, as the market reversed sharply with an 8.0 point drop on January 20 and a further 11.0 point drop on January 25. These declines were caused by a deeper analysis of the EIA data and a subsequent, more pessimistic GlobalData industry report, which collectively pushed the price down to a low of 18.0%.
The market's price action reveals key technical levels and evolving sentiment. Strong resistance has been historically established in the 30-33% range, which the market has failed to break through. The sharp sell-off in late January established a new support level around the 18-19% mark, from which the price has since recovered. The total traded volume of 9,784 contracts suggests consistent engagement, and the major price swings in January were likely accompanied by heightened volume, indicating strong conviction from both buyers and sellers as new information was processed. The recovery to the current 28.0% price suggests that more recent, positive real-world data, such as the SEIA report confirming over 30 GW installed through Q3 2025, is now outweighing the pessimistic forward-looking projections from January.
Overall, the chart reflects a market that is cautiously optimistic but highly sensitive to new data as it awaits a final resolution. The long-term trend is positive, but the sharp January reversal shows that trader confidence is fragile and susceptible to official forecasts. The current price of 28.0% indicates that while the market sees the "At least 50 GWdc" outcome as unlikely, it assigns it a non-trivial probability, having priced out the worst-case fears from late January. The market is now consolidating near its historical resistance, suggesting a period of waiting for the definitive annual installation figures to be released.
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
📉 January 25, 2026: 11.0pp drop
Price decreased from 29.0% to 18.0%
Outcome: At least 50 GWdc
What happened: The primary driver of the 11.0 percentage point drop on January 25, 2026, in the prediction market for "At least 50 GWdc" of US solar capacity in 2025 was the release of industry projections indicating lower anticipated installations. Specifically, a GlobalData report on January 1, 2026, projected that the U.S. would add 47.9 GW of solar in 2025, falling below the 50 GWdc threshold. This data, combined with a broader narrative of policy-induced uncertainty from measures like the "One Big Beautiful Bill Act" and Foreign Entities of Concern restrictions that impacted solar outlooks for 2025 and 2026, likely contributed to a downward reassessment of the outcome's probability. Social media was mostly irrelevant, as prominent posts from key figures, such as President Trump's tariff threats, occurred after the price movement on January 26, 2026.
📉 January 20, 2026: 8.0pp drop
Price decreased from 27.0% to 19.0%
Outcome: At least 50 GWdc
What happened: The primary driver of the 8.0 percentage point drop in the prediction market "How much solar capacity will be installed in the US in 2025?" (Outcome: "At least 50 GWdc") on January 20, 2026, was likely the U.S. Energy Information Administration's (EIA) Short-Term Energy Outlook (STEO). Released on January 13, 2026, this official report forecast only 26 gigawatts (GW) of new solar capacity for 2025, significantly below the 50 GWdc threshold. This definitive data release from a credible source directly contradicted the market's "at least 50 GWdc" outcome and preceded the price movement. Social media activity was mostly irrelevant, as a notable post from former President Trump regarding tariffs occurred after the price drop and was not directly related to the 2025 US solar capacity forecast.
📈 January 16, 2026: 13.0pp spike
Price increased from 14.0% to 27.0%
Outcome: At least 50 GWdc
What happened: The primary driver of the 13.0 percentage point spike in the prediction market on January 16, 2026, was likely the U.S. Energy Information Administration's (EIA) Short-Term Energy Outlook (STEO), released on January 13, 2026. This official report projected significant growth in U.S. solar capacity, with one summary indicating a forecast of 33% increase in solar generation in 2025 and another noting approximately 26 GW of new solar capacity additions in 2025. These forecasts, alongside a December 8, 2025, report from SEIA and Wood Mackenzie stating "Nearly 50 GWdc are expected to come online in 2025", provided strong evidence that the "At least 50 GWdc" outcome for 2025 was highly probable. There is no evidence from the search results of social media activity acting as a primary driver, with relevant social media discussions appearing to lag this news. Therefore, traditional news and official data releases were the primary driver of this price movement.
4. Market Data
Contract Snapshot
The provided page content only states the market question: "How much solar capacity will be installed in the US in 2025?" It does not contain information regarding the specific triggers for YES or NO resolution, key dates/deadlines, or any special settlement conditions for this contract.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Implied probability |
|---|---|---|---|
| At least 30 GWdc | $1.00 | $0.03 | 100% |
| At least 40 GWdc | $0.93 | $0.13 | 93% |
| At least 50 GWdc | $0.28 | $0.74 | 28% |
| At least 60 GWdc | $0.07 | $0.97 | 7% |
| At least 70 GWdc | $0.07 | $0.98 | 7% |
Market Discussion
Discussions about US solar capacity in 2025 generally predict continued significant growth, with the US Energy Information Administration (EIA) forecasting 32.5 GW of utility-scale solar PV additions, while other analyses suggest total additions could be around 47.9 GW . However, there is debate regarding the pace of this growth, with some experts anticipating a slowdown compared to previous years due to policy uncertainty, rising interest rates, and permitting challenges . Despite potential headwinds, solar is broadly expected to dominate new electricity-generating capacity additions, driven by strong underlying economics and increasing energy demand, although concerns exist about grid infrastructure and supply chain issues.
5. How Did U.S. Energy Capacity Markets Perform in Q4 2025?
| Total Q4 2025 Utility-Scale Additions | Approximately 17.2 GW |
|---|---|
| Full-Year 2025 Utility-Scale Solar | Approximately 32.5 GWdc |
| Interconnection Queue Backlog (end 2023) | Nearly 2,600 GW |
Q4 2025 saw record utility-scale capacity additions, especially solar. The final quarter of 2025 demonstrated a powerful year-end acceleration in utility-scale energy projects, with approximately 17.2 GW of new capacity reaching commercial operation, making it one of the strongest fourth quarters on record. Utility-scale solar PV dominated these additions, bringing approximately 9.7 GWdc online in Q4, which contributed to a total of roughly 32.5 GWdc for full-year 2025 utility-scale solar capacity. Battery storage also experienced a record quarter, adding approximately 4.8 GW of capacity. This robust performance was largely driven by the long-term tax credit stability and novel adder provisions provided by the Inflation Reduction Act (IRA).
Persistent challenges hindered overall 2025 solar capacity growth and future forecasts. Despite this strong Q4 performance, significant structural headwinds persist within the U.S. energy market. The national interconnection queue bottleneck remains a critical constraint, with nearly 2,600 GW of generation and storage capacity waiting by the end of 2023. Historically, only about 14% of projects that enter these queues are ultimately built. The total U.S. solar capacity for 2025, combining utility-scale with an underperforming distributed generation sector, likely settled in the 41-43 GWdc range, falling below the EIA's projection of 39 GWac (equivalent to 51-55 GWdc). Furthermore, the International Energy Agency (IEA) has revised its 2025-2030 renewable growth forecast downwards, partly due to the U.S. forecast, citing concerns over 'foreign entities of concern' (FEOC) restrictions and the potential for earlier-than-expected phase-out of some tax credits.
6. How Did FEOC Rule Enforcement Delay Q4 2025 Solar Projects?
| Total US Solar Capacity Delayed | 2.3 GW (NextEra, AES, Invenergy Q4 2025 earnings ) |
|---|---|
| NextEra Energy Delayed Capacity | 1.2 GW (NextEra Energy ) |
| AES Corporation Delayed Capacity | 650 MW (AES Corporation ) |
The enforcement of Foreign Entity of Concern (FEOC) rules substantially delayed utility-scale solar projects in the U.S. during Q4 2025. Major installers NextEra Energy, AES Corporation, and Invenergy publicly disclosed the postponement of 2.3 GW of aggregate solar capacity from a Q4 2025 completion to 2026. This disruption was primarily due to severe supply chain issues and regulatory uncertainty concerning FEOC rules, which affect the eligibility of projects for tax credits if they use components from certain foreign entities. A lack of detailed guidance from the U.S. Department of the Treasury compelled developers to adopt cautious strategies to avoid significant financial penalties.
Financial penalties and existing vulnerabilities intensified project delays for developers. The prospect of a 20% penalty for incorrect calculations and a 10% penalty for suppliers providing false information created strong incentives for developers to defer projects. This situation was worsened by pre-existing supply chain weaknesses, including persistent tariffs and general material shortages. Even companies with robust supply chains, such as NextEra Energy, which delayed 1.2 GW, and AES Corporation, with 650 MW delayed, experienced significant postponements as the industry struggled to secure fully FEOC-compliant modules.
Delayed capacity represents a significant revision to 2025 solar forecasts. The cumulative 2.3 GW of postponed capacity constitutes a material downward adjustment to the projected 2025 U.S. solar installation forecast, accounting for approximately 6% of the total expected annual capacity. In response to these challenges, corporate risk mitigation strategies prioritized securing long-term tax credit eligibility over adhering to initial 2025 project timelines, resulting in widespread deferrals into 2026.
7. How Much Solar Capacity Awaited Commercial Operation by Year-End 2025?
| Delayed Solar Capacity | 8,200 MW (as of Dec 31, 2025) - |
|---|---|
| Total Solar Capacity in Queue | 956 GW (end of 2024) |
| Median Interconnection Time | Over four years (for 2018-2024 projects) |
An estimated 8,200 megawatts (MW) of utility-scale solar projects reached mechanical completion but failed to achieve commercial operation by December 31, 2025, across the seven major U.S. Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) - . This substantial non-operational capacity highlights the severity of the grid interconnection bottleneck, which is now considered a primary impediment to accelerating the U.S. energy transition. This figure is a projection derived from an observed 20% delay rate for planned large-scale solar capacity in the third quarter of 2025, applied to an estimated 41 gigawatts (GW) of projects targeting completion by year-end .
Numerous factors, including massive queues and policy changes, caused the delays. These include massive queue volumes, with 956 GW of solar capacity actively seeking grid connection across the U.S. as of the end of 2024 , and systemic process delays that have pushed the median time from interconnection request to commercial operation to over four years for projects completed between 2018 and 2024 . Physical infrastructure constraints, such as insufficient transmission capacity, also contribute. Furthermore, the legislative phase-out of the solar Investment Tax Credit (ITC) under the 'One Big Beautiful Bill Act (OBBBA)' of 2025 created a rush for projects to achieve commercial operation by year-end, overwhelming already strained interconnection study and approval processes . The delayed capacity is not evenly distributed, with PJM Interconnection (2,500 MW) and NYISO (2,000 MW) contributing disproportionately to this backlog.
Idle capacity impacts targets, requiring reforms and transmission expansion. The 8,200 MW of idle, mechanically complete solar capacity represents a significant blow to 2025 national solar installation targets, accounting for over 26% of the 31 GW installed in 2024 . This situation reveals a systemic misalignment between generation development, policy goals, and grid infrastructure planning. While regulatory responses like FERC's Order No. 2023 aim to streamline interconnection processes, their full impact will become clearer in subsequent years. Ultimately, addressing the bottleneck will require not only process reforms but also a national commitment to proactive, large-scale transmission planning and development, as easing generation permitting without parallel transmission capacity expansion will only worsen the issue .
8. Did U.S. Residential Solar Decline Outweigh Utility-Scale Growth in 2025?
| US Residential Solar (Q3 2025) | 1,088 MWdc installed, 4% decline YoY and QoQ |
|---|---|
| US Utility-Scale Solar (Q3 2025) | Record 9.8 GWdc installed, 26% YoY and 68% QoQ increase |
| 2025 Utility-Scale Capacity Forecast | 41 GWdc new capacity [learnings] |
The U.S. residential solar sector experienced a significant contraction in 2025, largely driven by policy changes in California. National residential installations in Q3 2025 saw a 4% year-over-year and quarter-over-quarter decline, totaling 1,088 MWdc. California's residential market endured a sharp downturn, with Q1 2025 installations reaching their lowest point since Q3 2020 at 255 MWdc, primarily due to the Net Billing Tariff (NEM 3.0) drastically reducing compensation for exported solar energy and extending payback periods. This slowdown was further compounded by high interest rates and broader supply chain constraints.
Utility-scale solar saw record-breaking, unprecedented growth nationally in 2025. New installations in Q3 2025 amounted to 9.8 GWdc, representing a substantial 26% year-over-year increase and a 68% quarter-over-quarter increase. The utility-scale sector is projected to add a total of 41 GWdc of new capacity for the full year 2025, propelled by robust demand from data centers, the strong economic viability of solar-plus-storage projects, and supportive federal policies such as the Inflation Reduction Act [learnings, 2]. Through the first three quarters of 2025, solar power accounted for 58% of all new electricity-generating capacity added to the U.S. grid.
Despite residential sector challenges, overall U.S. solar capacity expanded significantly in 2025. The growth observed in the utility-scale sector was quantitatively much larger than the decline in the residential segment, leading to a year of exceptionally strong national solar capacity expansion [2, learnings]. The reported national residential decline was 4% year-over-year in Q3 2025, not exceeding 20%, and even with California's sharp downturn, this did not substantially offset the robust gains in the utility-scale segment.
9. How Do EIA Solar Data Revisions Impact 2025 Forecasts?
EIA solar capacity data often undergoes upward revisions to final figures. The U.S. Energy Information Administration (EIA) data on solar capacity experiences significant revisions between its preliminary Electric Power Monthly (EPM) reports and the final Electric Power Annual (EPA) figures . The final EPA figures incorporate finalized survey data, comprehensive distributed generation information from the annual EIA-861 survey, and more rigorous validation, which often leads to upward revisions, particularly for small-scale and behind-the-meter solar capacity .
Solar capacity forecasts have shown significant volatility and accuracy shifts. Historical analysis of EIA projections versus actual solar capacity additions reveals considerable year-to-year volatility . For instance, in 2022, the EIA significantly over-forecasted additions, projecting 17 GWac but only realizing 10 GW, a deficit of over 40% primarily attributed to supply chain disruptions and project delays . Conversely, 2023 demonstrated strong accuracy, with 32.4 GW installed against a 31 GWac projection, reflecting improved market conditions .
Future forecasting requires disaggregation and monitoring evolving market bottlenecks. For 2025 prediction markets, a robust forecasting approach is crucial, involving disaggregation into utility-scale and distributed generation segments, and applying a dynamic 'realization rate' based on leading indicators . The analysis suggests that the primary drivers of future forecasting error will shift from past supply chain issues to new bottlenecks such as grid interconnection queues, permitting timelines, and labor availability . Therefore, market participants should prioritize monitoring grid integration, transmission, and permitting developments .
10. What Could Change the Odds
Key Catalysts
The Inflation Reduction Act (IRA) continues to be a strong driver for long-term solar deployment, projected to significantly boost capacity over the next decade and stimulate domestic manufacturing. Additionally, falling interest rates in late 2024 were expected to invigorate demand, particularly in the residential sector, by lowering financing costs and accelerating investments. Strong Q4 2025 installation reports, when released, could further elevate the final 2025 total beyond current conservative forecasts, supported by a significant increase in U.S. solar module manufacturing capacity which reached 60.1 GW by Q3 2025.
Conversely, several bearish factors dampened growth. The "One Big Beautiful Bill Act" (OBBBA), enacted in July 2025, introduced policy uncertainty that reportedly caused a sharp slowdown in renewable energy contracting and could reduce cumulative U.S. solar and wind buildout by 41 GW by the decade's end. Furthermore, finalized Anti-Dumping/Countervailing Duty (AD/CVD) tariffs in May 2025 led to a 13% year-over-year increase in module costs for distributed generation, negatively impacting installations. Persistent high interest rates in early 2025 also contributed to elevated financing costs, delaying or canceling projects. Interconnection bottlenecks for utility-scale projects, with over 1,000 GW awaiting transmission approval, remain a significant challenge to operational capacity additions, compounded by "Foreign Entities of Concern" (FEOC) restrictions and policy uncertainty that led to a nearly 50% downward revision in U.S. renewable energy forecasts for 2025-2030.
These conflicting forces contributed to a notable slowdown in the first half of 2025, with the U.S. solar industry installing 7.5 GWdc in Q2, a 24% decline from Q2 2024, bringing the H1 total to 18 GW. This mid-year deceleration suggests that despite anticipated late-year strength, the cumulative annual capacity may be tempered. The final reported solar installation figures for 2025, expected in Q1 2026, will be crucial in determining the market outcome.
Key Dates & Catalysts
- Expiration: March 31, 2026
- Closes: March 31, 2026
11. Decision-Flipping Events
- Trigger: The Inflation Reduction Act (IRA) continues to be a strong driver for long-term solar deployment, projected to significantly boost capacity over the next decade and stimulate domestic manufacturing [^] .
- Trigger: Additionally, falling interest rates in late 2024 were expected to invigorate demand, particularly in the residential sector, by lowering financing costs and accelerating investments [^] .
- Trigger: Strong Q4 2025 installation reports, when released, could further elevate the final 2025 total beyond current conservative forecasts, supported by a significant increase in U.S.
- Trigger: Solar module manufacturing capacity which reached 60.1 GW by Q3 2025 [^] .
13. Historical Resolutions
No historical resolution data available for this series.
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