The vibe on the RE+ tradeshow this week in Las Vegas was typically constructive. A defiant nature took maintain on the primary full day of the convention, with everybody reassuring one another that the photo voltaic trade will proceed to thrive regardless of federal policy shifts.
However beneath that sticky-sweet façade is the reality: Some markets will fare higher than others, and we’re nonetheless ready on last steering for FEOC rules and different development timelines earlier than we’ll know the actual injury completed. There have been considerably fewer residential installers strolling the present this 12 months than beforehand, (hopefully) as a result of they’re additional busy wrapping up tasks earlier than the residential ITC expires at year-end. The residential market will likely be hit exhausting subsequent 12 months, with Wooden Mackenzie analysis director Sylvia Leyva Martinez predicting a 13% detraction in 2026.
I realized that stat and extra at SEIA and Wooden Mackenzie’s analysis briefing on Wednesday. Analysis and coverage analysts are attempting their finest to foretell what the U.S. photo voltaic trade will seem like over the subsequent few years, however that’s troublesome when issues appear to vary day by day. Listed here are just a few highlights the teams really feel assured on:
SEIA refocuses coverage efforts to the states
SEIA president and CEO Abby Hopper began the briefing by acknowledging {that a} profitable photo voltaic trade can’t tie its future to federal incentives that “whip backwards and forwards.” Whereas nonetheless spending time educating federal policymakers, SEIA is shifting to work in three areas: 1) placing power storage coverage first, 2) rising state advocacy, particularly in states with solar-supportive governors, and three) persevering with efforts at boosting home manufacturing.
With power storage methods somewhat spared from adjustments in HR1, SEIA will proceed advocating for the know-how that’s typically complemented with photo voltaic. Many are additionally assured that state incentives could re-emerge to spice up localized photo voltaic improvement. And now’s “not the time to stroll away from onshoring,” Hopper stated, particularly as photo voltaic and storage tasks of the long run will want home merchandise to satisfy Dept. of the Treasury guidelines the trade doesn’t but know.
FEOC-compliant storage tasks are nearly unimaginable
Whereas nonetheless awaiting last guidelines, the essential understanding of FEOC guidelines is that photo voltaic/storage tasks that use too many Chinese language parts will likely be denied federal tax credit. With battery cells comprising 50% of a BESS’s system price, home battery cells are wanted to satisfy the FEOC threshold. And naturally, there are only a few battery cells made in America, with most coming from Chinese language companies.
Kasim Khan, Wooden Mackenzie senior analysis analyst, stated it is rather doubtless that power storage tasks in 2026 and past is not going to get the funding tax credit score (ITC) that was prolonged to the market. But when extra EV battery producers swap over to producing cells for the stand-alone storage market, issues may change shortly.
It’s unlikely a self-sufficient photo voltaic panel provide chain is ready up in America
There may be greater than sufficient home photo voltaic panel capability to produce the market, however entry to upstream parts continues to be missing. With over 55 GW of solar panel assembly presently sited in america, and fewer than 50 GW anticipated to be put in annually via 2030, a provide of American-assembled photo voltaic panels with overseas parts may theoretically meet the nation’s demand. As tasks have discovered extra distinctive methods to calculate home content material percentages utilizing balance-of-system parts, much less weight is being positioned on silicon wafers and cells being made in America. But it surely results in an fascinating query, posed by WoodMac’s Martinez: Going through an oversupply scenario, can america grow to be a photo voltaic panel exporting nation?
We’re already shedding tasks in 2025
Most utility-scale photo voltaic tasks come on-line in This autumn, however WoodMac is already seeing a 24% lower in installs to this point this 12 months. As soon as the 12 months ends, the group expects to see a 2% lower in put in capability. Whereas photo voltaic tasks will nonetheless get constructed, particularly because the nation requires extra quick-sited electrical energy to satisfy information heart demand, the subsequent few years will really feel a dip. Round 246 GW of latest photo voltaic is predicted via 2030 — a 21% decline over what was predicted earlier than HR1 hit the trade.
And there are nonetheless loads of unanswered questions. Though a Dept. of Interior mandate impacts photo voltaic tasks sited on public lands, private-land photo voltaic continues to be being affected by the slowdown in approval. If a transmission hookup is crossing public lands, signed-off tasks are being held up. How may that have an effect on giant tasks throughout the nation?
I’m totally on-board with the rah-rah angle within the trade — optimism and a constructive outlook will take us far. Solar energy is critical to satisfy U.S. power objectives, and the demand is there in all markets. Solar Energy World will proceed to be right here to kind via the newest coverage developments that may make all of it occur.