Reliable, abundant, and cost-effective, solar energy is hailed as a key driver in the world’s transition to clean, renewable power. How do US manufacturers meet the needs of this rapidly evolving sector, and what challenges do they face?
In October 2025, US solar manufacturing reached a critical milestone. For the first time, solar panel production capacity surpassed 60 gigawatts (GW), enough to meet total annual domestic demand and representing a historic shift toward reduced reliance on foreign components. Growth in this industry has been sudden and fast, with manufacturing capacity increasing by more than 700% between 2022 and 2026, from 8 GW to 65 GW. 
Currently, the nation is home to more than 10,000 solar companies, which employ close to 300,000 people, while solar installations total around 5.8 million. “This growth is a testament to the power of American innovation,” said Abigail Ross Hopper, President and CEO of the Solar Energy Industries Association (SEIA), the national trade association for the solar and solar storage industries. “We’re building factories, hiring American workers, and showing that solar energy means made-in-America energy.”
The challenge, now, is that solar installations are struggling to keep pace with manufacturing output, leading to massive oversupply, plummeting module prices, and industrial job losses. 
Severe and chronic oversupply in the global solar industry is largely driven by manufacturing capacity expansion in China, where production output now exceeds global installation demand. 
At the peak of China’s 2024 solar boom, new factories were announced almost weekly, resulting in module prices dropping by up to 50%. In the first half of 2025, the country’s four leading solar manufacturers, including LONGi, Trina Solar, Jinko Solar, and JA Solar, reported combined losses of $1.54 billion.
With US solar companies sourcing the majority of their panels overseas, the market was quickly flooded with low-cost panels, threatening to derail ongoing efforts to expand the domestic solar supply chain. In 2024, module imports exceeded 54 GW, while installations were around 40 GW, prompting calls for increased government intervention through tariffs, trade sanctions, and anti-subsidy probes. In the short-term, some companies resorted to reducing production speeds or delaying factory expansions.
The Federal Solar Tax Credit includes a 30% rebate for solar systems installed at residential properties before the end of 2025. It covers expenses such as the cost of solar panels, inverters, battery storage systems, and installation labor, and is widely acknowledged as the most effective way to reduce the cost of a home solar installation. 
Although it was due to last another nine years, the Trump administration repealed the incentive in 2025 with the introduction of One Big Beautiful Bill (OBBB), which revoked many incentives in the Inflation Reduction Act in a bid to reduce federal spending on green energy. 
The SEIA warned that removing these credits would likely lead to a sharp decline in residential installations, impacting up to 330,000 jobs and $220 billion in investment by 2030. Commercial projects are eligible for the tax benefit until 2027. 
Insufficient grid capacity and long interconnection queues are stalling solar project progress, contributing to excess inventory and increased costs. In 2023, a Berkeley Lab-led study reported that nearly 2,600 GW of energy and storage capacity were stuck in transmission grid interconnection queues, with solar, wind, and battery storage projects accounting for more than 95% of delayed projects.
Restrictive permitting regulations, introduced by the Trump administration in 2025, are causing additional delays. Wind and solar initiatives are now subject to increased federal oversight, with the Secretary of the Interior, Doug Burgum, required to provide final sign-off on all new leases. In an open letter published in December 2025, 143 solar companies urged the administration to reconsider. “Federal agencies are implementing this directive in a way that amounts to a nearly complete moratorium on permitting for any project on both federal and private land, no matter how minor.” 
The nation’s largest solar panel manufacturer, First Solar, projected 2026 sales below Wall Street estimates, citing the administration’s new regulations as a leading cause. “Many of our customers continue to face both regulatory and commercial challenges, including federal permitting approval delays,” the company said. The SEIA warns that up to 500 new projects are at immediate risk of delays. 
Vertically integrated solar companies can benefit from additional tax benefits, increased supply chain visibility, and reduced market competition. In China, which controls more than 80% of the photovoltaic supply chain, vertically integrated manufacturing is a core strategy, with solar companies overseeing the production of everything from polysilicon and ingots to wafers, cells, and modules.
A similar approach in the US could help to combat Chinese dominance. Tesla is leading the charge after unveiling its latest energy product, the Tesla Solar Panel, at the beginning of the year. The company has always relied on third-party solar panels, but this announcement marks a shift toward a more integrated ecosystem. The EV maker will assemble the products at its Gigafactory in Buffalo, New York, with plans to scale to an initial capacity of over 300 MW per year. “This is the first time that we’ve actually fully designed and manufactured our own solar panel,” said Colby Hastings. “This is available now. This is very real-world.”
Anti-subsidy probes are official investigations to discover and combat foreign subsidies on imported goods that may be causing material injury to domestic producers. The Trump administration recently initiated investigations into the solar industry to counter cheap imports, address oversupply, and protect US manufacturing. 
Preliminary findings, shared earlier this year, showed that solar manufacturers in India, Indonesia, and Laos were benefiting from heavy government subsidies, resulting in new duties of 126% on solar imports from India, 81% on Laos, and 86-143% on Indonesia. 
The announcement prompted praise from the US solar group, the Alliance for American Solar Manufacturing and Trade, which had petitioned Commerce to investigate overseas government subsidies. “American manufacturers are investing billions of dollars to rebuild domestic capacity and create good-paying jobs,” said Tim Brightbill, Alliance’s lead attorney and Co-Chair of Wiley Rein’s International Trade Practice. “Those investments cannot succeed if unfairly traded imports are allowed to distort the market.”
Though intended to support domestic solar manufacturers, the duties create some uncertainty, likely raising production costs for US firms reliant on imported components. 
To combat tariffs and anti-subsidy probes, regain greater control of their supply chains, and deliver “American-made” quality, more solar companies are investing in domestic facilities. 
Solar panel manufacturer Qcells, for example, is currently developing an ingot, wafer, and cell factory in Cartersville, Georgia, which should be fully operational by the end of 2026, adding 3.3 GW to US annual solar capacity. Not only is the facility the nation’s largest ingot and wafer plant ever built, but it is also the first location to produce ingots, wafers, cells, and panels under one roof in at least eight years. 
At the end of 2025, Corning started production at its new solar wafer manufacturing plant in Michigan, with plans to “grab up to 15% of the US market for wafers”. With the most recent government data showing that China controls 97% of wafer production, the facility presents a significant risk for Corning, but its CEO, Wendell Weeks, is optimistic: “We think we can be the best in the world at this,” he said. The $1.5 billion plant, which has created 400 new high-paying advanced manufacturing jobs, has the capacity to produce over one million solar wafers per day. 
T1 Energy recently began construction of its G2 Austin cell factory in Rockdale, Texas, which is expected to open with 2.1 GW of cell production by the end of the year. The 100-acre facility will cost $400 million to build and generate around 1,800 jobs, with a planned second phase expected to add another 3.2 gigawatts of cell production. “G2 Austin is a centerpiece of our strategy to build an integrated US polysilicon solar supply chain,” said the company’s Chairman and CEO, Dan Barcelo. “Solar is the most scalable, reliable, and low-cost energy available today, and I look forward to the future of American solar running through Rockdale, Texas.”
These latest expansions in domestic solar manufacturing mean the entire solar supply chain has been reshored, creating long-term opportunities for the solar industry. Now, US companies can focus on increasing production capacity, driving innovation, and improving product quality. 
Image credit: dee karen/Shutterstock

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