Regulation, Solar Industry

2026 Solar Market Update: Tariffs, FEOC Rules, Tax Credit Changes & Procurement Trends

Key updates on solar tariffs, FEOC compliance, safe harbor deadlines, domestic content requirements, supply chain risks, and utility-scale market trends in 2026.

Policy Updates

New FEOC rules went into effect

The One Big Beautiful Bill Act (OBBBA) introduced new Foreign Entity of Concern (FEOC) requirements. Projects that were not safe harbored by the December 31, 2025 deadline must meet the new requirements to be eligible for clean energy tax credits. Review the changes, including how to calculate a project’s Material Assistance Cost Ratio (MACR) for FEOC compliance here.

IEEPA tariffs were struck down

The US Supreme Court ruled in February that the tariffs imposed by President Trump under the International Emergency Economic Powers Act (IEEPA) were illegal. Importers who paid tariffs are entitled to refunds and that process has begun. The Treasury Department reported that refunds pushed the June budget deficit to $120 billion.

New AD / CVD penalties announced

The Department of Commerce launched Antidumping and Countervailing Duty (AD/CVD) investigations for India, Indonesia, Laos, and Ethiopia. US manufacturers have also asked for an investigation into Korea. The DOC released preliminary CVD amounts in February, with tariffs more than 100% for two of the cited countries.

New Section 232 tariffs

Guidance on new Section 232 and Section 301 tariffs was released in July and August. Minimum Import Pricing and ad valorem tariffs will be effective December 4, 2026.

Safe Harbor deadline passed for ITC credits

The end of 1H 2026 was the end of the runway to secure eligibility for the Investment Tax Credit (ITC). In the last moments, a federal court decision re-extended the 5% Safe Harbor to establish beginning of construction to projects larger than 1.5 MW. Solar projects of all sizes that were not safe harbored by July 4, 2026 must be placed in service by the end of 2026 in order to claim federal tax credits under sections 45Y and 48E.

Market Trends

Iran conflict put supply chains at risk

Ongoing conflict between the US and Iran has jeopardized traffic in the Strait of Hormuz. The constriction of the US oil supply has highlighted the risk of depending on foreign oil. The uncertainty in the shipping environment also means potential supply chain disruptions for manufacturers, specifically aluminum and rare minerals.

Solar equipment free of tariff exposure saw price premiums

Additions to Section 232 tariffs, ongoing AD/CVD investigations, and new FEOC requirements drove demand for solar equipment that is safe from current or future tariffs and other penalties. This demand is pushing prices higher for domestically made solar equipment as well as supplies from low-tariff-risk countries.

Module prices across the board are expected to increase due to anticipated tariffs stacking on top of existing duties and fees.

DG market continued shift to TPO; utility-scale sector accelerated

The landscape for Distributed Generation is still adjusting to the abrupt changes to clean energy incentives from the OBBBA. Third-party Ownership is gaining market share as a practical way for DG offerings to remain cost effective. One survey of solar installers predicts more than half of their projects will use the TPO model by the end of this year. TPO projects that safe harbored before July 4 retain tax incentive eligibility until 2030. SEIA expects TPO growth to start slowing in 2029.

Still, analysis shows the residential market may not be as soft as projected. Due to rising electricity rates, homeowner-financed systems are holding, even without tax credits, not declining.

Domestic manufacturing continued to come online

Announcements of new domestic manufacturing capabilities this year are celebrating operational reality rather than announcing future capacity. Projects hoping to claim the domestic tax credit must now have at least 50% domestic content. (Kinect Solar has domestically made equipment available immediately!)

Project execution risk rose

New rules and tariffs have made procurement compliance increasingly complex. Additionally, permitting and interconnection variability continue to leave projects open to timeline vulnerabilities. Developers and manufacturers are leaning more on execution tools like flexible warehousing and multi-site staging to streamline project execution amidst so many variables.

News to Celebrate

Record-breaking utility-scale capacity is expected to come online this year, with 51% of that capacity expected to be solar. There are 43GW of planned solar utility-scale capacity additions for the US in 2026!

Looking Ahead with Kinect Solar

Multiple solar policy determinations have been up in the air for much of 2026, with global conflicts and pending litigation creating even more market uncertainty. Reducing project risks wherever possible creates the best chances of optimizing outcomes and meeting project goals.

Kinect Solar’s services are optimized to maximize stability and predictability:

Product offerings include low-tariff-risk equipment and certified domestic content
Strategic sourcing provides options to protect against supply chain disruption
Solar experts can guide your procurement strategy to meet today’s requirements
On-demand warehousing and multi-site staging services to maintain flexibility in changing market conditions

See what we can do for your next project with a no-obligation logistics quote or equipment quote.

Flexible warehouse storage for solar manufacturers and large-scale solar developers.

High-quality solar equipment at wholesale prices from top-tier manufacturers.

Posted in Regulation, Solar Industry
Tagged in Solar developers, Solar Policy, Solar projects, solar tariffs