Adam-GlickExpected Solar and Battery Storage Market Trends moving into 2025

By Adam Glick, Sr Consultant, NATiVE Solar

Nothing exists in a bubble. In a very real sense, all things are interconnected in life. And nothing stays the same forever. In this market – these “truths” will always apply.

The macro-economics driving solar and battery tech sectors are converging for what may prove to be a wild ride next year. I wanted to write a bit from our perspective about how the many dynamics shaping our industry are expected to converge in 2025 -starting now.

Surging Demand
2024 was the biggest year ever for solar. And Texas led the nation with a massive 7.9Gigawatts of newly installed PV (photovoltaics). That’s almost 8 BILLION watts. It’s a lot. Here in Texas we also added nearly 2Gigawatts of BESS (Battery energy storage) – with total online battery capacity of 16gW expected by the end of 2025. Needless to say, even with the potential headwinds of continued higher interest rates, there continues to be massive demand for solar and backup storage in both the residential and commercial solar marketplace.

Supply Chain and Pricing Pressures
Even though many solar panels are manufactured here in the U.S., virtually all of the individual solar “cells” (silicon wafers) used to make panels are produced in China. Other materials such as raw rare-Earth elements and minerals also needed for solar panel and battery manufacturing are also often imported from all over the world. Expected trade wars between the U.S. and other countries – notably China – are expected to disrupt both pricing and supply chain logistics starting early in the year.

The current U.S. administration just last week imparted a new 20% tariff on all solar-related imports from China. The incoming administration may raise this even higher.

The implications here are that the costs to manufacture and ship many solar and battery components and products will almost certainly increase in 2025. At the same time, supplies may become constrained as countries, manufacturers and tech vendors navigate unfolding developments in international trade policy and manufacturing disruptions. These increases in cost are expected to be reflected in higher prices to the consumer and property owner considering the installation of new solar and/or battery capacity.

Technological Innovation
But there is Good News here as well. Looking into 2025, we expect to see some new technology that should improve efficiencies, functionality and reliability of both solar panels and battery storage products. Many new chemistries and manufacturing processes that have been in R&D labs for years are now starting to make their way into next-gen products we expect to see released in 2025. While they may take a few years to reach mass-adoption, new novel product classes such as Perovskite-based solar panels and “solid state” batteries should push the prices of existing mainstream products downward. The degree and speed at which this happens is hard to say, but historically, this is how most human technology goes over time.

Will we see lower rates for Solar Loans?
It’s obviously hard to know where interest rates are headed given all of the economic uncertainties sure to be swept in with a new U.S. administration -and other potential international geoeconomic and geopolitical convulsions.

This said, after higher rates (above 8% APR) a common offer for solar financing in 2024, we are seeing rates drop even now in mid-December. Will easing interest rates continue into and through 2025? We hope so, but for now cash buyers will continue to have an edge.

IN ANY CASE… NATiVE Solar will be here.
We’ve been here since 2007 and rode out all manner of “solar storms” which have pushed our industry in different directions over the years. 2024 was our biggest year ever (by revenue) and we find ourselves in a great position to support any scale residential or commercial designs and installations – from a smaller residential jobs up to multi-Megawatt commercial “solar farm” projects.