July 8, 2026
The federal policy turmoil has not slowed down the distributed solar generation (DG) market, but has actually accelerated it. In the cover story of the Q2 2026 issue of Solar builderI spoke with industry leaders to explain why the “middle market” of solar energy – too big for rooftops, too small for utilities – is becoming the most dynamic segment of the industry.
The recently passed safe harbor deadline, coupled with the One Big Beautiful Bill Act (OBBBA), has compressed margins and extended deal timelines from 60 days to 7-8 months as developers recalibrate expectations. Rising electricity demand – largely driven by data centers – is boosting deal flow despite policy headwinds, with speed and scale becoming solar’s key competitive advantage over slower-to-build alternatives like natural gas.
Recommended Resources:
- Megan Byrn, VP of business development at Standard Solar
- Jon Powers, Chairman of CleanCapital
- Markus Virta, managing partner at Cascadia Renewables
The article shows how the definition of DG has shifted: what was once considered ‘utility scale’ a decade ago (about 10 MW) is now comfortably within the typical range of DG from a few hundred kilowatts to 30 MW. Byrn of Standard Solar points to a fast-growing “orphan” segment between 30 and 100 MW that is completely outgrowing the traditional DG categorization.
Read this article exclusively in the Q2 2026 issue of Solar Builder.
Virta provides an engineering lens to the limitations of the electric grid, describing the challenge as a “physics problem” that involves both power (rate of delivery) and energy (amount of delivery) limitations. He advocates dynamic, location-based pricing and warns that VPP aggregators could outpace utilities if they don’t modernize their own distributed energy management systems (DERMS).
3 important points:
- The division in the market is increasing. DG splits into several sub-segments – traditional projects from 1 to 30 MW and an emerging ‘orphan’ segment from 30 to 100 MW – each with different capital and development needs.
- The post-ITC era requires recalibrated expectations. As the 48th tax credit safe harbor deadline reaches July 2026, developers and lenders must align early on tighter margins or risk lengthy, inefficient deal cycles.
- Grid physics, and not just policy, will shape DG’s future. Location-based, dynamic pricing – and who builds it (utilities or VPP aggregators) – can determine how quickly distributed resources can be integrated to meet the rising, non-coincident demands of data centers and electrification.
Brad Kramer is editor of Solar builder. He has been reporting on the energy sector since 2009, with a focus on renewables since 2022.
Tags: commercial and industrial, Community Solar, DER, DERMs, Distributed Energy Infrastructure (DEI), distributed generation, OBBBA, safe harbor, utility scale
