U.S. deploys 7.8 GW of solar in Q1

Despite the decline, solar accounted for 60% of all new electricity generating capacity in Q1 2026. Energy storage and solar combined represented 91% of new capacity, found the Solar Energy Industries Association and Wood Mackenzie.

By

Ryan Kennedy

11 Jun 2026

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According to the SEIA/Wood Mackenzie US Solar Market Insight Q2 2026 report, the United States solar industry installed 7.8 gigawatts direct current (GWdc) of capacity in the first quarter of 2026. This represents a 27% decline compared to the first quarter of 2025 and a 42% decline compared to the fourth quarter of 2025, following typical industry seasonality. 

Even with this decline, solar by itself accounted for 60% of all new electricity-generating capacity added to the grid during the quarter. When combined with battery storage, the two technologies accounted for 91% of all new domestic capacity additions in the first quarter. 

 On a state level, installation rankings for the first quarter of 2026 were led by Texas in the first position with 1,591 MWdc, followed by Florida with 1,044 MWdc, Ohio with 617 MWdc, Indiana in fourth, and California in fifth.

Utility-scale 

The utility-scale segment remained the largest market driver by deploying 5.9 GWdc in the first quarter of 2026. While this reflects a 34% drop year-over-year and a 45% reduction quarter-over-quarter, underlying contracting activity expanded significantly. Developers signed 6.3 GWdc of utility capacity agreements during the quarter, marking a 15% increase year-over-year. The surge in contracting was driven primarily by projects in Texas, with offtake agreements led by data and technology companies.  

Looking ahead, a total utility-scale pipeline of 216 GWdc supports a strong buildout through 2030, though near-term capacity additions face constraints from permitting headwinds.  

Specifically, a memorandum from the Department of the Interior regarding solar and wind development is estimated to be affecting roughly 30% of the early-stage utility solar project pipeline, said the report. Over the longer term, Wood Mackenzie forecasts that the utility-scale segment will add 211 GWdc between 2026 and 2031. 

Residential 

The distributed generation segments recorded divergent trends in the first quarter. The residential segment installed 1,179 MWdc of capacity, achieving a 6% increase year-over-year, though dropping 15% from the final quarter of 2025. Residential volumes were temporarily buoyed by an overflow of installations that had been initiated at the end of 2025 so customer-owned projects could qualify for the expiring Section 25D tax credit.  

California, Florida, and Illinois led the residential rankings, with Florida and Illinois posting their strongest quarters since the end of 2024.  

However, following the bankruptcy of the second largest national installer, updated permitting data, and tighter tax equity availability, the residential market is projected to experience a 21% contraction over the full year of 2026. The market is expected to return to growth in 2027, expanding at an average annual rate of 6% through 2031, supported by prepaid offerings and third-party ownership (TPO) projects utilizing safe harbor strategies. 

Commercial and industrial 

The commercial solar segment secured its second-highest first quarter on record by installing 523 MWdc. This represents a minor 4% decline year-over-year and a 25% drop quarter-over-quarter.  

California dominated this space by adding 201 MWdc, making up 38% of the national total as legacy NEM 2.0 projects continued to come online before an April 2026 installation deadline. Illinois and Pennsylvania followed in commercial performance, contributing 49 MWdc and 40 MWdc respectively.  

The commercial market is projected to contract later in 2026 due to California’s tariff transition and interconnection delays in legacy markets like New York and Massachusetts , before rebounding between 2028 and 2030 as developers rush to build out safe-harbored projects.  

Community 

The community solar segment installed 247 MWdc in the first quarter, representing a 4% year-over-year decline and a 67% plunge quarter-over-quarter.  

New York drove the bulk of this decline, dropping 46% year-over-year to 61 MWdc. Despite this, an 8.2 GWdc project pipeline and improved queue efficiencies in Illinois and New York are projected to drive a 1% national community solar expansion in 2026 to reach roughly 1.7 GWdc. 

Manufacturing 

From a supply chain and manufacturing standpoint, no new module manufacturing capacity was added in the United States during the first quarter of 2026. While domestic module production has grown historically to cover about 70% of 2025 installation volumes, manufacturers face severe domestic cell shortages.  

The United States possesses only 3 GW of operating cell capacity, forcing module producers to rely heavily on imported cells. Import reliance is further complicated by trade actions, including high preliminary anti-dumping and countervailing tariff rates announced by the Department of Commerce for cells and modules imported from India, Indonesia, and Laos. These three nations, combined with Malaysia, Thailand, and Vietnam, supplied 78% of all US cell imports in 2025.  

Additionally, the industry is grappling with regulatory uncertainty surrounding Prohibited Foreign Entity provisions under the One Big Beautiful Bill Act. Full guidance is delayed, which has forced many manufacturers with ties to China to reorganize under American ownership. Fortunately for developers, a recent quantification shows that a vast majority of the utility-scale pipeline completed safe harboring by the end of 2025, protecting it from these foreign entity requirements. 

Pricing 

National solar system pricing fell across nearly all segments year-over-year in the first quarter, with the exception of commercial solar. Residential system costs fell 7% year-over-year to an average of $3.21 per watt direct current ($/Wdc), down from $3.44/Wdc in the first quarter of 2025. Utility-scale fixed-tilt systems dropped 3% to $0.90/Wdc, down from $0.92/Wdc, while utility single-axis tracking systems fell 3% to $0.99/Wdc, down from $1.02/Wdc.  

Price drops were largely driven by solar module prices decreasing across all segments, including a drop of more than 20% for distributed projects, bringing average module prices down to $0.34/Wdc from $0.43/Wdc the previous year.  

The report found price relief stems primarily from the repeal of International Emergency Economic Powers Act tariffs, which previously placed 20% to 50% duties on certain regions.  

Conversely, commercial solar system pricing bucked this trend by increasing 4% year-over-year to $1.67/Wdc, up from $1.60/Wdc. Cost escalation was caused by a 60% year-over-year surge in equipment costs for both electrical and structural balance-of-system components, driven higher by Section 232 metal tariffs that have impacted imported and domestic equipment prices, said the report. 

Looking ahead 

Looking forward, the five-year outlook for the United States solar industry has been revised upward by 1.4%. 

While this long-term trend indicates that the cumulative U.S. solar fleet will double over the next five years, it also reflects a stagnation in annual additions. Annual capacity additions are forecast to remain essentially flat, hovering at an average of 43 GW per year through 2031.

The flat trajectory stands in contrast to the previous doubling of the domestic solar fleet, which took only three years to accomplish. Market analysts conclude that despite intensifying power demand across the country, structural constraints like permitting bottlenecks, lengthy equipment lead times, grid interconnection queues, and the ongoing transition into a post-tax-credit environment continue to function as major headwinds limiting further annual expansion.