June 10, 2026
The Solar Energy Industries Association (SEIA) new Market insight into solar energy (SMI) report, developed in collaboration with data firm Wooden Mackenzieshows that the US solar and storage industry is on relatively solid footing despite continued political headwinds at the federal level throughout the year.
The report shows that the U.S. solar industry added 7.8 GW of new solar capacity in the first quarter of 2026 alone, exceeding a total of 6 million installations. Furthermore, solar energy maintained its top position among sources of new grid expansions, with photovoltaic and storage projects accounting for as much as 91% of new capacity installed in the first quarter of the year. Today, nearly 9% of total U.S. electricity production comes from solar energy, accounting for about seven times the share of the electric grid compared to just a decade ago.
Darren Van’t Hof, interim president and CEO of SEIA, says U.S. energy buyers have made their voices heard. As fuel prices continue to fluctuate thanks to the uncertainty surrounding Iran’s Strait of Hormuz, the industry is focusing on safe, low-cost options that come online quickly, and solar energy fits that bill perfectly.
But it is not all good news, Van’t Hof adds. Despite the rosy numbers for new capacity additions, the broader solar and renewable energy industries must remain vigilant against persistent political obstacles moving forward. These obstacles have caused a 27% year-over-year decline from the first quarter of 2025, and a 42% quarter-over-quarter decline from the fourth quarter of 2025.
“But as energy demand skyrockets, political and regulatory attacks are slowing down the resources we depend on,” he says. “Hindering the only sector that is actively building new energy is a reckless gamble that will only drive up electricity bills. The stakes are simply too high to allow the gridlock in Washington to continue.”
Slow federal permitting has left 457 U.S. solar and storage projects in limbo, the report said, leaving them politically vulnerable. Somewhat ironically, states won by President Trump in 2024 accounted for 74% of all solar capacity installed in the first quarter of 2026, with Texas, Florida and Solar Dark Horse Ohio taking the lead.
Even as solar and storage accounted for the lion’s share of new capacity additions in the first quarter, the year-over-year numbers were far from rosy.
Decrease almost across the board
Of the 7.8 GW of new solar capacity installed in the first quarter of 2026, 5.9 GW was in the utility sector alone, the report said. Unfortunately, that number represents a 34% year-over-year decline from Q1 2025, and a 45% quarter-over-quarter decline from Q4 2025.
According to SEIA, C&I and community solar also saw declines year over year, with both segments seeing a 4% decline in installation compared to the first quarter of 2025.
Of course, these numbers reflect “typical seasonality” for the solar industry, at least in part. During the winter, the industry will likely experience a slow season thanks to poor weather across much of the U.S., the report said.
The only place where the solar market saw year-over-year increases in the first quarter of 2026 was the residential sector. The report states that while residential solar and storage installations fell 15% from the fourth quarter of 2025, there was a 6% increase year-over-year, with approximately 1.18 GW installed last quarter. Additionally, a record 45% of these residential installations were combined with battery storage, an increasing trend across the industry.
“The residential solar market grew 6% year-over-year in the first quarter, which was one of the strongest quarters in the past two years, excluding the fourth quarter of 2025,” the report said. “Customer-owned projects had to be installed (not interconnected) by the end of 2025 to qualify for the Section 25D tax credit. As a result, overflow interconnections and demand supported solid installations in the first quarter, which is typically the weakest quarter based on residential solar seasonality.”
The residential segment is likely to see a similar decline for the rest of the year, with SEIA’s report predicting a 21% decline by 2026. However, the long-term forecast expects “consistent growth” between 2027 and 2031.
I look ahead
The solar market is a bit uncertain at the moment, with installation numbers rising compared to all other generation sources but remaining flat compared to 2025. Michelle Davis, head of solar at Wood Mackenzie, says the sector still has a few political storms to weather before things really start to look up.
“We predict that U.S. solar energy growth will remain steady over the next five years, despite the need for more power in the U.S.,” she says. “We have seen a notable increase in solar procurement in utility planning, but current permitting bottlenecks continue to create near-term headwinds.”
Still, the broader U.S. solar pipeline is strong, the SEIA report said. Looking to 2027 and beyond in the US solar sector, the new report expects an average increase of 43 GW per year over the next five years.
The SMI’s broader outlook for the future of the sector has changed “minimally” since its last report in March. Wood Mackenzie estimates a safe solar capacity of more than 200 GW, which currently supports near-term installation numbers.
“Interconnect queue timelines have improved slightly, but bottlenecks and long equipment timelines continue to create headwinds,” the report said. “Forecasts for demand growth remain strong, which is starting to translate into higher solar procurement in utility plans (particularly beyond 2030), but with significant variation across the country.
“And while the solar sector has strong market fundamentals, it will take some time to adapt to a post-tax credit world, especially for the distributed segments, which we predict will decline by 2026.”
Tags: commercial and industrial, Community Solar, Residential Solar, SEIA, solar market research, storage, utility scale, Wood Mackenzie
