Secured Carbon is a streamlined risk management platform that unlocks clean energy tax credits to save the planet. Our software harnesses the power of the tax code to enable standardized and scaled investment in the clean energy transition.
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Unleashing Solar Energy Finance
Published 5 months ago • 3 min read
Unleashing Solar Energy Finance
The Unleashing American Energy presidential executive order left the transferable clean energy 30% investment tax credit (ITC) unchanged. Last year, an estimated $7 million solar photovoltaic ITCs were traded. Today I’ll drill (baby, drill) into the U.S. solar energy finance stats to shine sunlight on the solar ITC opportunities in the 2025 $50+ billion solar installation market.
The energy transition may feel stalled, but solar energy investment continues. Residential solar demand is growing, with the market continuing the trend toward residents leasing equipment from or roof space to third-party owners (TPOs). As TPOs finance more small projects with thin margins and slow tax credit processing, Secured Carbon's AI-powered ITC verification and registration cuts complexity and costs to accelerate underwriting and access to this revenue stream and credit enhancement for financing.
These forecasts were developed using two cutting edge reasoning models: DeepSeek R1 served on the Perplexity AI web crawler, released on January 29, and ChatGPT o3-mini-high, released on January 31. They have their strengths and weaknesses, but when prompted to fact check each other, their 2025 forecasts converged to the numbers reported here. Calculations were then verified using Claude Sonnet 3.5, which also coded the data visualizations.
Chart 1: U.S. Solar Overall Market Overview - 2025 forecast
In aggregate, the U.S. solar market is set to invest $56 billion to $60 billion on producing 40 Gigawatts of annual capacity this year, with the consensus of a healthy 7% growth rate through the end of the decade. The Utility Scale end of the market is already producing $1/watt solar power, which is the predicted inflection point for solar.
Chart 2: U.S. Solar Segment Distribution Bar Graph - 2025 forecast
A solar energy system priced at $1/Watt would unlock the potential of the sun to provide low-cost, clean limitless electricity to the U.S. and the rest of the world, at the same cost of coal-based generation. Department of Energy, 2010
It beggars the question of the effect on the pricing and profitability of utility providers. And why are electric rates still rising? One issue is that generation is only a part of the cost of delivering electricity.
Also, solar is generated during daylight hours, usually a time of low demand. Consumer demand peaks after daylight and prices spike. In advanced solar markets like California where more than 25% of electricity is renewably generated, the spread can be as large as $0.30/watt. 2025 has been dubbed the year of battery storage with a surge of projects across all segments designed to buy low and sell high.
At the Residential Scale, production is on the order of $3/watt due to the fixed costs of inverters and labor. This means that $20 billion will produce less than a third the output at 6 GW of what this could produce at Utility Scale. But the resident avoids paying transmission tolls. The ideal residential system also includes battery storage to shave these peak costs.
While the ideal investment and return in residential solar continues to evolve with the grid, the cost of more involved solar+battery systems pushes the break-even return out further. Meanwhile the more affluent early solar adopter market may be reaching saturation, with 2025 seeing penetration into lower income and rental properties.
Our analysis of adoption curves and phases showed that low-income communities are not only delayed in their adoption onset but also saturate more quickly at lower levels.
This might explain the shrinking market for owner-or-directly owned systems. The forecast for 2025 puts Third-Party Owned (TPO) installations at 4/5ths of the total. This could be lower-income, lower-tax-burdened homeowners and rental-owning landlords choosing to install no-cash-down leased systems from aggregators.
Chart 3: The U.S. Solar Residential Donut
TPO is forecasted to continue its expansion over the past years to take $16 billion in investment in millions of individual installations.
Table 1: U.S. Solar Residential Table
Roughly following Pareto’s Law, Solar Leases will constitute 70% of TPO investment, trouncing the Power Purchase Agreement (PPA) market. PPAs pricing is often tied to utility rates in complex structures, and rate schedules are often complex enough as they are.
Chart 4: U.S. Solar TPO Donut
Solar Leases dominate thanks to simpler sales structure and guaranteed revenue streams. PPAs are preferred in high-electricity-cost states (CA, MA, NY) for percentage savings.
Table 2: U.S. Solar TPO Table
Given that the TPO market constitutes smaller residential projects with thin investment margins, Secured Carbon has developed an AI-driven platform to reduce the cost of registering the ITCs while increasing the speed and efficiency.
In my next article, I will discuss other challenges in the TPO market that Secured Carbon is addressing with AI.
Respectfully,
Tac Leung
CEO
Secured Carbon
Secured Carbon is an energy finance AI Agent that automates compliance verification and underwriting to scale energy independence and security for all.
The company is founded by entrepreneurs hailing from the world’s most renowned financial institutions including Standard Chartered Bank, Lloyd’s of London, Citi, Merill Lynch, Bank of America and Wells Fargo.
Supercharging the clean energy transition with the power of transferable tax credits.
Secured Carbon is a streamlined risk management platform that unlocks clean energy tax credits to save the planet. Our software harnesses the power of the tax code to enable standardized and scaled investment in the clean energy transition.
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