Solar Market Insight Report

Introduction

• The US solar industry installed 11.4 gigawatts direct current (GWdc) of capacity in Q2 2026, a 45% increase from Q2 2025 and a 43% increase compared with Q1 2026. After a seasonally weak Q1, installations rebounded sharply, driven almost entirely by utility-scale volumes.
  • The residential segment installed 995 MWdc of solar capacity, declining 12% year-over-year and 10% quarter-over-quarter.
  • The commercial segment installed 638 MWdc, increasing 11% year-over-year and 27% quarter-over-quarter.
  • The community solar segment installed 231 MWdc, declining 14% year-over-year and 8% quarter-over-quarter.
  • The utility-scale segment installed 9.6 GWdc, increasing 61% year-over-year and 56% quarter-over-quarter.
• The quarter’s strength was concentrated in utility-scale solar as developers built out safe-harbored pipelines ahead of tax credit deadlines. Q2 is seasonally stronger than Q1, but the scale of the utility-scale increase reflects a race to place safe-harbored projects into service before the Section 48E/45Y window closes. In contrast, the distributed segments continued to soften year-over-year as the market adjusts to the expiration of the Section 25D residential credit at the end of 2025.
• Solar and battery storage accounted for 70% of all new electricity-generating capacity added in the first half of the year, reflecting the ability of these industries to consistently build new capacity – a vital advantage for the capacity-constrained US grid. Solar by itself accounted for 45% of all new capacity, a slight decline compared to last quarter, driven by an uptick in offshore wind installations.
  Domestic nameplate module manufacturing capacity stands at roughly 66 GWdc after only about 1 GWdc of new module capacity came online in Q2 2026. The August Section 232 action on polysilicon and the FCC’s inverter action will now reshape the economics of a full domestic solar supply chain.
• Our outlook for the US solar industry from 2026 to 2031 has changed minimally: an increase of 1.2%, mostly from the utility sector. Our new outlook still reflects an approximate doubling of the US solar fleet over the next five years, but annual additions remain essentially flat compared with the three years it took for the last doubling of the US solar industry.