Policy changes in the US, especially those under the One Big Beautiful Bill Act (OBBBA), impacted the country’s community solar segment, where installations declined 36% year-on-year (YoY) to 437 MW DC during H1 2025, according to a new Wood Mackenzie and the Coalition for Community Solar Access (CCSA) report.  

As per the report, the US community solar market shrank mainly because New York and Maine saw big drops following updates to their programs. In some states, programs are nearly full, while others like Maryland, Massachusetts, and New Jersey are experiencing a transition to new program versions (see US Installed 18 GW New Solar PV Capacity In H1 2025).  

Despite growing customer demand for community solar, progress is slow on the policy front. One avenue of demand could be the new state markets, but legislation to support them is taking time to pass.

During the reporting period, subscriber acquisition costs contracted 5% YoY on average across all customer segments. Even as corporate demand was strong, accounting for 53% of total capacity installed during H1 2025, low-to-moderate income (LMI) customers represented only 9%. 

Developers and subscription management companies are facing increased headwinds in subscribing KMI customers, points out the report. They are now exploring alternative distributed solar programs to seek long-term growth, like the non-residential distributed solar that covers projects within system sizes of 2 MW DC to 20 MW DC.

“Utilities are increasingly appreciating the value of community-scale resources because they can be deployed quickly, with storage, and close to customer load,” says Wood Mackenzie’s Senior Analyst Caitlin Connelly, who is also the lead author of the report. 

“The early expiration of the ITC will only add to this difficulty given the window for any new projects to secure tax credits is so small,” added Connelly. “The passage of legislation in new markets could potentially add upwards of 1.1 GWdc through 2030.” 

Analysts forecast this market segment to contract by 29% in 2025. Through 2030, the national installed community solar capacity is projected to contract by an average of 12% annually, shared Connelly.

Wood Mackenzie has cut its cumulative 5-year forecast for this segment by 8% following the OBBBA. 

US community solar has reached a cumulative 9.1 GW DC capacity and is expected to exceed 16 GW DC by 2030. Wood Mackenzie’s optimistic scenarios see an extra 1.3 GW DC from supportive policies, while pessimistic scenarios could cut 1.2 GW DC due to tax and state hurdles. 

“The final bill offers a crucial four-year window for projects already under development to come online and secure the Investment Tax Credit (ITC), supporting near-term buildout. As of mid-2025, there are over 9 GWdc of community solar projects under development, with over 1.4 GWdc known to be under construction,” counts Connelly.