Rooftop solar is in for a tough few years in the US

Rooftop solar installations are set to drop in the U.S., with 2026 numbers expected to hit their lowest point since 2020. The main reason: last year, Congress and President Trump eliminated the 30% federal tax credit that had made solar panels more affordable for homeowners. That same law also killed the 30% credit for home battery backup systems, which many people install alongside solar panels. The industry was already dealing with high interest rates, tariffs, and a major policy change in California that reduced payments to solar customers.

Losing the tax credit makes installing solar more expensive at a time when U.S. systems already cost more than in other countries — around $2.58 per watt here compared to roughly $1 per watt in Australia. Analysts expect it could take more than a decade for the industry to match the installation numbers it hit in 2023, a peak driven by a temporarily boosted tax credit and a rush of Californians installing panels before their state's compensation rules changed.

Not every state is struggling equally. California's residential solar market is expected to grow 17% this year, and Florida, the second-biggest rooftop solar market, could see growth of 62%. Plenty of sun and rising utility bills seem to be keeping demand alive in these bigger markets despite the lost tax break. Separately, a smaller trend is picking up: balcony solar, cheap plug-in panels that renters can use without owning a roof. Several states have passed laws allowing them, and while they produce far less power than a full rooftop system, they offer another way to generate some of your own electricity if a full installation isn't in the cards.