The U.S. solar market is set to double its fleet over the next five years, driven by strong demand from utilities, commercial customers, and data centers, according to the Solar Energy Industries Association (SEIA). By 2026, solar is expected to contribute 8% to U.S. electricity generation. However, new policies under the One Big Beautiful Bill Act (OBBBA) and rising tariffs are creating market uncertainty and increasing costs.
As of June 2026, the recent forecast shows that residential solar installations may sharply decline following the expiration of key tax credits after 2025. Meanwhile, the SEIA notes that new tariffs on solar imports from several countries are raising costs for manufacturers, despite domestic production covering 70% of U.S. installations. This could further constrain the market and create uneven growth prospects.
With the solar industry ranking in the bottom 18% of over 247 Zacks industries, analysts project a 10.7% decline in aggregate earnings estimates for the current fiscal year, indicating a challenging landscape ahead. Prominent companies to watch include First Solar, Enphase Energy, and T1 Energy, each navigating a complex environment of changes, forecasts, and demand shifts.
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