The Headline: Installs Are Down, Not Up
US residential solar installations are forecast to decline 18 to 21% in 2026. Q1 2026 data already shows the shape of it: total US solar installs (residential plus commercial plus utility) came in at 7.8 GWdc, down 27% year over year and down 42% quarter over quarter. Residential specifically installed 1,179 MWdc, up 6% year over year but down 15% quarter over quarter, a pattern consistent with a 2025 year-end pull-forward effect as buyers rushed to close before the tax credit expired.
Commercial and C&I solar is a mixed picture in the same window: it grew 6% in 2025 but a 13% decline is forecast for 2026, driven specifically by California's regime change, with 2027 to 2030 growth of roughly 6% a year projected once that adjustment works through the system.
Why: The Incentive Cliff, Not a Demand Collapse
The One Big Beautiful Bill Act, signed July 4, 2025, ended the 30% Section 25D residential tax credit for any system installed on or after January 1, 2026, a cliff expiration with no phase-down. Cash and loan buyers get zero federal credit in 2026. The only remaining path to a 30%-equivalent credit is Section 48E, which is claimed by the system owner under third-party-ownership structures, which is the direct reason TPO is surging (see the TPO shift guide).
California adds a second, state-specific pressure: NEM 3.0 cut solar export credits roughly 75% starting April 2023, the NEM 2.0 grandfathering window closed April 15, 2026, and a CA Court of Appeals upheld NEM 3.0 in March 2026 against legal challenge. Battery storage has shifted from optional to functionally required for CA system economics as a result.
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Book a Solar CallCustomer Acquisition Cost: The Number Behind Every Sales Decision
Residential solar CAC is spiking 40% to $0.84 per watt in 2026, after hitting a five-year low of $0.60/W in 2025. That low was an anomaly, not a trend: the looming 25D expiration created a demand rush that let installers coast on inbound while cutting marketing spend. That cushion is gone. On a roughly $31,135, 12kW system priced around $2.58 to $2.95 per watt before incentives, CAC has historically run $800 to $2,500 per closed customer, a target LTV:CAC ratio of about 3:1.
Installers using outsourced 1099 dealer networks face the largest 2026 margin compression from this shift, while companies pulling acquisition in-house are preserving more margin per watt. Average embedded solar loan dealer fee sits around 22% in 2026, adding $5,700-plus to a typical loan balance, funding the entire dealer, setter, and closer commission stack. See the dedicated dealer-fee compression guide and the dealer-fee calculator for the full mechanic.
The Bankruptcy Wave and the Jobs It Took With It
Over 100 US solar companies have filed bankruptcy or shut down since 2023. Freedom Forever, the #2 US residential installer, filed Chapter 11 on April 15, 2026, following Titan Solar Power (Chapter 7, June 2024), SunPower (Chapter 11, Aug 2024), Sunnova and its financier Mosaic (both Chapter 11, June 2025), and PosiGen (Chapter 11, Nov 2025). The full breakdown is in the bankruptcy wave survivor playbook.
The employment picture tracked it: roughly 21,000 clean-energy jobs lost and $24 billion-plus in cancelled investment through September and October 2025, at least 1,691 solar-specific layoffs recorded via WARN notices in 2025, and a national solar workforce of 280,000-plus in late 2025, down from a record 464,053 in the 2024 National Solar Jobs Census.
The One Real Growth Story: Battery Storage
Battery storage is the genuine bright spot inside an otherwise contracting market, and it is worth calling out precisely because so much of the rest of this guide is about decline. National solar-plus-storage attach rate hit 45% in Q1 2026, up from 38% a year earlier, and residential battery storage grew 51% year over year in 2025, to 3.1 GWh. Community solar tells a similar counter-story on the cost side: subscriber acquisition cost actually fell 12% in 2025 to $69/kW, evidence that rising CAC is a residential-rooftop-specific problem, not a universal one.
For anyone selling into residential solar right now, battery attach and financing-agnostic conversion are the two levers that are actually working in 2026, while the volume of the overall market is not.
| Metric | 2026 figure |
|---|---|
| Residential install forecast | Down 18 to 21% for the year |
| Q1 2026 total US solar installs | 7.8 GWdc, down 27% YoY, down 42% QoQ |
| Q1 2026 residential installs | 1,179 MWdc, up 6% YoY, down 15% QoQ |
| Customer acquisition cost (CAC) | $0.84/W, up 40% from a 2025 low of $0.60/W |
| Solar companies bankrupt or shut down since 2023 | 100+ |
| Solar+storage attach rate, Q1 2026 | 45%, up from 38% a year earlier |
| Residential battery storage growth, 2025 | 51% YoY, to 3.1 GWh |
| Clean-energy jobs lost through Sept/Oct 2025 | Roughly 21,000 |
Figures sourced individually to SEIA, Wood Mackenzie, Solarinsure, and SurgePV; see the sources list below.
What this means for you
- Residential solar installs are forecast down 18 to 21% in 2026, driven by the Section 25D tax-credit cliff, not by falling demand for solar itself.
- CAC is spiking 40% to $0.84/W after an artificial 2025 low, and dealer fee (~22%) is compounding the squeeze on any acquisition channel that runs through a commission stack.
- Over 100 companies have gone bankrupt since 2023, including the #2 US residential installer in April 2026.
- Battery storage (45% attach rate, 51% YoY growth) is the one segment genuinely growing inside a contracting market.
Sources
The external data in this guide draws on the sources below. Figures described in the text as estimates or industry triangulations are directional and are not attributed to a single dataset.
- SEIA, Solar Market Insight Report Q2 2026
- Wood Mackenzie, US residential solar CAC set to spike 40% in 2026
- SEIA via TaiyangNews, US solar installations fall 27% to 7.8 GW in Q1 2026
- SEIA, clean energy provisions of the Big Beautiful Bill
- CA Energy Savings, NEM 3.0 explained
- Solarinsure, complete list of solar bankruptcies and closures
- pv-magazine-usa, over $24 billion in clean energy investment and 21,000 jobs lost in 2025
- Solar Power World, solar layoffs and closures run rampant in 2026
- SurgePV, US residential solar market trends 2026
- EnergySage, solar panel cost local data