Solar has been the largest source of new electricity generation capacity in the U.S. for two consecutive years. This, according to the Federal Energy Regulatory Commission (FERC).
Utility-scale solar capacity has now moved ahead of wind, hydropower, and nuclear. And looking ahead, FERC projects that another 86 gigawatts of solar could be added over the next three years, pushing solar past coal in total installed capacity.
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The data is clear, and the scale of recent expansion is hard to ignore. Utility-scale solar capacity increased from 91.82 GW in September 2023 to 164.53 GW by December 2025. To put that in perspective, during the same time period, wind added about 13.4 GW, while natural gas contributed just 6.83 GW.
FERC’s projections suggest that by early 2029, utility-scale solar could represent roughly 17%–18% of total U.S. generating capacity, second only to natural gas.
The question, of course, is whether this demand is enough to justify going long on solar?
From 2022 to 2025, solar stocks got hammered.
The Invesco Solar ETF (NYSEMKT: TAN), a widely used benchmark for the sector, peaked in late 2021 and fell from around $100 to around $26 by April 2025, a decline of roughly 74%, reflecting the impact of higher interest rates and weaker demand across the industry.
But then something happened.
Interest rates stabilized, removing a key pressure on project economics and valuations. At the same time, underlying demand remained intact, supported by utility-scale build-outs, electrification trends, and rising power needs tied to data centers.
Battery storage economics improved, too, which forced the market to price solar, not just as panels and cells, but as reliable generation and infrastructure. Policy became more predictable, as well, and Wall Street began to reassess the sector. What had been priced as a challenged industry was increasingly viewed as a long-term infrastructure growth story.
Of course, this doesn’t mean solar stocks are without risk. Certainly, you can’t ignore the possibility of elevated interest rates, interconnection delays, and supply chain issues. Yet you also can’t ignore the transition of our energy economy, which is happening right in front of our eyes. This is why solar stocks should not be disregarded, but instead approached in a way that gets you some exposure to the upside while limiting your risk.
