The U.S. solar industry is in a transition period. With the residential investment tax credit now expired, and the 48E tax credit for large-scale projects on its way out, the number of installations across all markets is expected to drop. Research groups say the U.S. solar industry won’t ever again reach the annual installation high of 50 GW seen in 2024.
To predict how the United States will fare in a non-incentivized era, one could look at the last 10 years in the United Kingdom. That country altered solar incentive programs around 2016, and installation habits sharply declined — from a high of 4 GW in 2015 to just 268 MW in 2018. The U.K. has taken years to rebuild its solar efforts, and residential installs are just now surpassing 2015’s high. Although the two markets differ in many ways — the U.K. reached 20 GW total installed in 2025 while the U.S. manages twice that amount annually — the abrupt removal of incentives affected real people and jobs in the U.K., and the United States may face a similar disruption.
The solar world is a different place than it was one decade ago, but there’s no guarantee the United States will come through the next few years completely unscathed. Here’s how the U.K. solar market navigated its own troubling incentive transition period.
U.K. market history
The U.K. government offered a feed-in-tariff (FIT) to the residential and small commercial market beginning in 2010, which incentivized energy suppliers to pay homes and businesses for generating and exporting renewable energy. The FIT was available to projects smaller than 5 MW and came in two forms: a generation tariff and an export tariff.
The generation tariff was for electricity produced by a solar system, regardless of whether the home or business exported it. If you had a solar system, you got paid for the power it produced. The generation tariff was originally set at around 40 pence/kWh. The export tariff was a separate payment for any electricity sent to the grid and was initially set around 3 p/kWh. Guaranteed for 10 to 25 years, the FIT payments contributed to a large increase in solar installations in the early 2010s, and U.K. residents and businesses could quickly recoup the expense to install solar with these favorable incentives.
UK solar market. Credit: Solar Power Portal
Eventually, deployment caps were introduced in 2016 that limited the size of installations that could receive the highest tariff rates, and adjusted tariff rates provided lower payouts. The FIT program stopped accepting applications in March 2019, with the government citing that it had served its purpose to grow domestic renewable energy.
In the utility-scale market, the U.K. offered renewable obligation certificates (ROCs). First introduced in 2002, ROCs were issued for each megawatt-hour of electricity produced. Project owners could sell these certificates, alongside generated power, for an additional revenue stream. Energy suppliers/utilities could buy ROCs to demonstrate compliance in sourcing requirements. The U.K. announced the closing of the ROC program in 2015 and accepted its last new applicants in 2017, but some certificates will remain until completely phasing out in 2037.
Uncertainty around future incentives led the U.K. solar market to seriously contract in 2016. Advocacy group Solar Energy UK (then known as Solar Trade Association) said one-third of the industry’s 35,000 solar jobs were lost in 2016, and 40% of solar companies planned to exit the solar power sector entirely. The 2016 Brexit vote and 2020 exit from the European Union also contributed to a turbulent economic period in the U.K.
The residential solar market stagnated between 2017 and 2020, barely surpassing 85 MW installed each year. It was clear a revamped program would be necessary to re-energize the U.K. solar industry.
Recovery in the U.K.
In 2020, the U.K. introduced the new Smart Export Guarantee (SEG) to residential and small commercial solar systems. A simple generation tariff was no longer on the table, but an adapted export tariff is included in the SEG. The program requires energy suppliers to pay system owners for the power they export to the grid, although a generation rate is not specified. Energy suppliers realized that higher payouts could attract new customers, so they adapted the SEG into multiple time-of-use (TOU) tariffs. Households can now earn more incentives than the old FIT program if they successfully navigate TOU export options.
U.K. standards body MCS tracks the small-scale market and determined that 2025 will be a record year for U.K. solar in terms of number of installations. It’s estimated that the U.K. will have closed the year with 235,000 total solar installs, exceeding the previous annual record of 203,125 installs set in 2011. Paying residential solar customers for the power they produce has unsurprisingly revitalized the market.
On the utility side, the ROC program was replaced with the contracts for difference (CfD) scheme, which offers a fixed-rate contract that is essentially a power purchase agreement (PPA). This protects project owners from volatile electricity prices and guarantees a set price for electricity generation. CfD was first introduced to large-scale energy projects in 2014, but the government mostly favored offshore wind and didn’t begin accepting solar to the auction rounds until 2021.
Gareth Simkins, senior communications adviser for advocacy group Solar Energy UK, said that the U.K. market has been growing strongly since 2022, after incentive programs across all markets were stabilized.
“We are now in build-out mode, with gigawatts of projects set to be backed by the CfD scheme in the coming years,” he said.
Lessons learned
Multinational investment manager Quinbrook Infrastructure Partners recently reached a milestone in the U.K., completing the country’s largest solar project. The feat didn’t look possible one decade ago, said Keith Gains, Quinbrook managing director and U.K. regional leader. But the CfD scheme, along with the government-supported Nationally Significant Infrastructure Project process, brought the 373-MW Cleve Hill Solar Park project online this past summer.
Quinbrook’s 373-MW Cleve Hill Solar Park in the U.K.
“The U.K. market is the size of ERCOT in Texas. Previously, all planning consents are at a local level. A population of a couple hundred-thousand might decide whether a project goes ahead or not,” he said. “The government decided that if we’re going to hit our net-zero targets and we need these big projects, we have to take the decision-making away from the locals and take it to the national level. Cleve Hill was the first renewables project to be consented under the Nationally Significant Infrastructure Project program.”
That national support has been key to getting the U.K. solar market back on its feet.
“There needs to be a pathway to reducing the risk around actually being able to deliver the projects,” Gains said. “A project the size of Cleve Hill — hundreds of megawatts — costs many millions of pounds to go through the development pipeline. If you don’t think you can actually deliver that project economically, you’re not going to put the first pound to work. Having that governmental approval process gives you a lot more confidence that you’re going to be treated equally and know the rules of the game you’re playing. The contract for difference gives you the price certainty, the backstop, whereby if power prices did reduce, you’re going to get that level of pricing.”
Quinbrook’s 1-GW Gemini Solar + Storage project in Nevada
During the U.K. market slowdown, Quinbrook shifted its investments to complementary areas in energy transition, like flexible generation. The group increased its presence in the United States, also funding the largest project here, the nearly 1-GW Gemini Solar + Storage project in Nevada. Gains said Quinbrook isn’t planning to pivot to other energy areas when faced with an unincentivized U.S. solar market. At least on the utility-scale side, there’s enough demand for new electricity to keep everyone busy.
“When the ROCs ended, everything just ground to a halt [in the U.K.]. That’s not happening [in the United States]. The level of growth of demand from data centers is beyond everybody’s expectation. There is a lot of societal pressure on companies to decarbonize as well, and that pushes the companies toward wanting to buy power from renewable sources,” he said. “It’s just got to be a change of mindset. You can’t just sit there and rely on the tax credits. There’s a way to make these projects economic. These companies need power, and they will pay for the power. It’s not all doom and gloom in America by a long shot. It’s still the land of opportunity.”
