US solar installations surged to 11.4 gigawatts in the second quarter of 2026, a 45 percent increase from the same period a year earlier, even as domestic module manufacturing added only about 1 gigawatt of new capacity during the quarter, according to the latest quarterly report from SEIA and Wood Mackenzie published this week.
Utility-scale segment drives the rebound
The US solar industry installed 11.4 gigawatts direct current of capacity in Q2 2026, a 45 percent increase from Q2 2025 and a 43 percent increase compared with Q1 2026. After a seasonally weak first quarter, installations rebounded sharply, driven almost entirely by utility-scale volumes.
Utility-scale solar led the surge with 9.6 GW installed, up 61 percent year-over-year. The strong quarter reflects developers moving quickly to bring projects online ahead of the July 4, 2026 safe-harbor deadline for tax-credit eligibility.
Texas again led total capacity additions with 3.44 GW, followed by Arizona at 1.76 GW and Florida with 1.61 GW. Nationally, the country now has enough operating solar capacity to power more than 50 million American homes, representing over one-third of all households nationwide.
The report attributed the strong utility-scale installations to developers building out safe-harbored project pipelines ahead of federal tax credit deadlines, with the July 4, 2026 begin-construction deadline establishing a safe-harbored pipeline of between 216 GW and 240 GW expected to support installations through 2030. Distributed solar segments continued to weaken year-over-year as the market adjusted to the expiration of the Section 25D residential tax credit at the end of 2025. The residential segment installed 995 megawatts, declining 12 percent year-over-year and 10 percent quarter-over-quarter.
Module factory ramp almost flat
The installation surge landed against a domestic manufacturing base that barely expanded. Domestic nameplate module manufacturing capacity stands at roughly 66 GWdc after only about 1 GWdc of new module capacity came online in Q2 2026.
That figure traces a striking trajectory. The US added 8.6 GW of solar module manufacturing capacity in Q1 2025, driven by eight new or expanded factories in Texas, Ohio, and Arizona, bringing the total to approximately 51 GW. A further 4.3 GW was added in Q2 2025, bringing the total to 55.4 GW.
The pace has since slowed dramatically, with just 1 GW added across Q2 2026 despite installations running at record levels. Earlier GCN reporting on the Section 232 polysilicon tariff framework detailed how those trade actions have complicated new factory investment decisions throughout the supply chain.
The solar manufacturing industry remains gripped by uncertainty around Prohibited Foreign Entity requirements, with the US Treasury Department and IRS having released only partial guidance under the One Big Beautiful Bill Act. There were no additions of upstream manufacturing capacity, including polysilicon, wafer, or cell manufacturing, and establishing new facilities for this more resource-intensive and technologically complex part of the solar value chain continues to move slowly.
Section 232 and the supply-chain reset
On August 6, 2026, President Trump issued a proclamation imposing import restrictions under the Section 232 investigation of imports of polysilicon and its derivatives, mostly targeting downstream solar energy components. On July 28, 2026, the FCC added foreign-produced connected power inverters to its Covered List, prohibiting new models from receiving the equipment authorization required to import, market, or sell them in the United States; the restriction applies only prospectively to new equipment authorizations, and previously authorized inverter models may continue to be imported and sold. The two actions create coordinated upstream and downstream pressure across the broader power infrastructure supply chain, affecting not only solar but also energy storage, wind, electric vehicle charging, microgrids, and other inverter-dependent grid resources.
According to the SEIA and Wood Mackenzie report, utility-scale fixed-tilt system prices increased 0.9 percent to $0.95 per watt, while single-axis tracking prices rose 2 percent to $1.06 per watt. Module prices for distributed solar declined by an average of 16 percent year-over-year to $0.37 per watt, while utility-scale module prices declined 2 percent to $0.33 per watt as procurement shifted toward more expensive domestic supply.
That cost pressure matters for an installation market the EIA’s long-term outlook already identifies as the primary vehicle for meeting surging electricity demand from data centers and electric vehicles through 2050.
Outlook: doubling the fleet, but annual gains plateau
SEIA and Wood Mackenzie revised their five-year outlook for the US solar industry upward, with Wood Mackenzie expecting the utility-scale segment to add 217 GW of capacity through 2031, an upward revision of 7.5 GW concentrated in Texas, Arizona, California, and Illinois. Their forecast still reflects an approximate doubling of the US solar fleet over the next five years, but annual additions remain essentially flat compared with current levels.
Solar and battery storage together accounted for 70 percent of all new electricity-generating capacity added in the US during the first half of 2026. Whether the manufacturing side can keep pace with that installation rate before the next wave of tax-credit deadlines is a central question for industry planners, with analysts noting that permitting and interconnection bottlenecks will constrain growth as the industry awaits the outcome of an appeal of the July 2025 Department of Interior directive requiring direct approval from the Interior Secretary’s office for projects on public lands, with that appeal still ongoing.
