The US community solar market reached a significant milestone in late 2025, surpassing 10 GWdc of cumulative installed capacity, according to a report by Wood Mackenzie in collaboration with the Coalition for Community Solar Access (CCSA). This achievement highlights the steady expansion of distributed solar adoption across the country, even amid shifting policy and market conditions.
Despite this milestone, the market experienced a 25% contraction in 2025, largely driven by slower installations in mature markets such as New York and Maine. Total installations for the year stood at 1,435 MWdc. However, the outlook remains positive, with national community solar capacity expected to recover and grow by approximately 12% in 2026, supported by improving project pipelines and expanding state-level participation.
Looking at the broader trend, the report notes that overall national installed community solar capacity across existing state programs is expected to contract at an average rate of 5% annually through 2030. This reflects challenges in sustaining rapid growth within established markets, even as new opportunities continue to emerge.
According to senior analyst Caitlin Connelly, the near-term growth of the sector is being supported by a strong development pipeline exceeding 8 GWdc, with nearly 29% of that capacity already under construction. Developers are simultaneously navigating federal policy uncertainty and interconnection queue delays, while working to meet strict construction and commissioning deadlines required to qualify for investment tax credits.
The contraction in 2025 was primarily influenced by weaker activity in states such as New York and Maine. However, growth momentum is expected to improve in 2026, driven by stronger installation activity in markets like Illinois and several Mid-Atlantic states, which are emerging as key contributors to national expansion. In the long term, the expansion of community solar is increasingly dependent on the creation of new state-level markets.
Developers have already built substantial pre-development pipelines in states such as Ohio, Iowa, Pennsylvania, and Michigan, where supportive policy frameworks are under consideration. If these proposed programs are implemented, they could collectively add more than 1.5 GWdc of capacity through 2030. However, the potential removal or expiration of the Investment Tax Credit (ITC) after 2030 is expected to complicate project economics and slow down new program development timelines.
Beyond traditional community solar models, developers are also expanding into what is increasingly referred to as “community-scale” solar. This segment includes solar projects up to 20 MWdc and represents a growing opportunity outside legislated community solar programs. States such as Ohio and Pennsylvania are becoming key focus areas for these projects, driven by rising electricity demand and the need for faster deployment of new generation capacity.
Utilities are also beginning to incorporate community-scale resources into long-term planning, particularly smaller utility-connected solar projects paired with storage systems. These assets offer faster deployment compared to large utility-scale projects and can enhance grid flexibility and reliability, especially in regions experiencing demand growth and grid constraints.
At the industry level, leadership from CCSA emphasized that surpassing 10 GWdc is a major milestone, reflecting the resilience of the community solar sector despite regulatory and policy uncertainties. The sector has already delivered meaningful electricity bill savings to hundreds of thousands of households and businesses.
At the same time, the industry is evolving, with increasing diversification into mid-scale solar and storage projects that are expected to play a long-term role in expanding access to affordable clean energy. Another key development shaping the industry is the continued decline in subscriber acquisition costs. On average, these costs fell by around 12% in 2025 compared to the previous year.
This decline is being driven by greater adoption of digital marketing tools, consolidated billing systems, and more efficient customer acquisition strategies. Looking ahead, costs are expected to continue trending downward through 2030, although low-to-moderate income (LMI) subscribers remain the most expensive segment to acquire. The sector is also witnessing rapid consolidation in subscription management platforms. In early 2026, Perch Energy acquired Solstice, following its earlier merger with Arcadia.
By the end of 2025, four major platforms and vertically integrated developers controlled approximately 55% of operational community solar capacity, indicating a more consolidated and structured market landscape. Overall, the community solar industry is entering a phase of moderated but sustained growth. While existing markets face saturation and policy-driven constraints, expansion into new states, combined with emerging community-scale solar opportunities and improving cost efficiency, is expected to support continued long-term development of the sector.
