What will happen to solar in 2026?
Looking Ahead: What Will 2026 Bring?
Policy Shifts and Market Dynamics
Federal tax credits have played a major role in making solar affordable, but those incentives are not guaranteed to last. Current legislation sets deadlines that require projects to be started by mid-2026 and completed by the end of 2027 in order to qualify for the full credit. Any delay could mean a reduced incentive or no credit at all. For homeowners and businesses, this creates urgency: install now while incentives are clear, or risk losing a substantial portion of your savings.
Technological Breakthroughs Approaching Reality
By 2026, several next-generation technologies are expected to move from laboratories into the marketplace. Perovskite tandem panels, which layer new materials on top of traditional silicon, are showing the potential to increase efficiency from today’s 20% to over 30% in real-world conditions. Quantum dot technology is also advancing, with the ability to capture and convert a broader spectrum of light—including reflections and low-light conditions—into electricity. These improvements could mean smaller systems generating more power, lowering the cost per watt and making solar viable in even more locations.
Global Solar Surge Continues
The world is not waiting. In the first half of 2025 alone, more than 380 gigawatts of new solar capacity was installed worldwide, a year-over-year jump of more than 60%. That momentum is expected to continue into 2026 as countries race to meet renewable energy targets and decarbonization goals. For homeowners and businesses, this means that solar technology is not just a trend—it’s becoming the backbone of the global energy system. Investing now puts you ahead of the curve and ensures you benefit from both the current incentives and the rapidly improving technology that will define the next era of clean energy.
Continued Growth in Solar Installations
Despite policy uncertainty, the U.S. solar market continues to expand at record pace. Forecasts show installations climbing from just over 50 gigawatts in 2025 to more than 60 gigawatts in 2026. This represents enough energy to power tens of millions of homes and shows that demand is not slowing down. Globally, solar is on track to become the single largest source of electricity by 2026, surpassing coal and natural gas in generation capacity. For consumers, this means that solar will only become more mainstream, with more financing, service options, and supporting infrastructure available.
Geopolitical and Supply Chain Tensions
Policy changes are also reshaping how solar products are sourced. Stricter rules are being put in place to ensure panels and components are produced by approved manufacturers and not by entities linked to geopolitical rivals. At the same time, tariffs and trade disputes could create price fluctuations in equipment and materials. With China continuing to expand its manufacturing capacity and dominate the global solar supply chain, the U.S. and other nations face a balancing act between energy independence and affordability. This could affect pricing, availability, and installation timelines starting in 2026.
Key Solar Considerations
Financial Incentives
In 2025, homeowners can still take advantage of the full 30% federal tax credit on solar and battery installations. This incentive significantly reduces upfront costs and improves return on investment. By 2026, the credit may be reduced or phased out entirely, making solar a more expensive investment for those who wait.
Market Dynamics
In 2025, installers are still able to schedule and complete projects relatively quickly, though demand is building. By 2026, installations are projected to rise sharply, which could lead to longer wait times and potential supply constraints as more people rush to secure solar before incentives decline.
Electricity Cost Protection
Going solar in 2025 locks in immediate savings and provides a reliable return on investment as utility bills start dropping. Electricity prices are projected to continue climbing in 2026, meaning the longer you wait, the more you pay the utility instead of investing in your own energy independence.
Policy Risks
The regulatory environment in 2025 is clear and favorable, with well-established tax incentives and straightforward eligibility requirements. By 2026, new rules and trade restrictions may limit which systems or components qualify for credits, introducing more uncertainty and potentially higher costs.
Technology
Solar panels installed today offer proven efficiencies above 20%, delivering strong performance and reliable output. By 2026, breakthrough technologies like perovskite tandem panels could push efficiency closer to 34%, allowing smaller systems to generate more power. While that’s exciting, the missed savings from waiting may outweigh the benefit of slightly higher efficiency.
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