The Q2 2026 A1 Solar Index report by distributor A1 SolarStore reveals a U.S. solar hardware market operating under significant regulatory constraints.
Inventory levels surged close to historic highs, driven primarily by importers rushing to beat incoming tariff deadlines and federal tax credit milestones rather than organic market demand. Tightened federal guidance and expanding import duties have further constrained low-cost supply chains, squeezing margins and leverage for retail buyers and large-scale developers alike.
Domestic content
Demand for domestic-made solar panels fell sharply following updated Treasury and IRS guidelines for the Inflation Reduction Act’s domestic content bonus. The clarified rules require underlying ingot and wafer production, not just cell coating and module assembly, to take place in the U.S. Transaction prices for domestic panels corrected 8.87% quarter-over-quarter to $0.510 per watt as the pool of qualifying hardware narrowed. Despite the price reduction, domestic-made modules remain the highest-priced equipment segment in the report.
Pricing
Seller leverage increased during the quarter as negotiating room narrowed. The national retail price gap between listed ask prices and final checkout prices shrank from $0.118 per watt in Q1 to $0.054 per watt in Q2. In the 600W+ module category, listing discounts shifted to a $0.138 per watt premium ($0.500/W transaction versus $0.362/W listing) as commercial EPC firms secured available high-wattage, FEOC-compliant stock ahead of the July 4 Section 48E construction-start deadline.
Import restrictions
Protectionist trade policies continue to limit alternative import channels. Cumulative tariffs on Chinese modules remained above 200%, maintained by the 50% Section 301 rate and the 10% Section 122 baseline.
Preliminary antidumping and countervailing duty decisions issued on April 24, 2026, further restricted major Southeast Asian manufacturing hubs:
U.S. Customs is collecting cash deposits at the border for these duties, with retroactive critical circumstances applied to select Indian and Indonesian suppliers. In response, manufacturers are seeking alternative supply sources, including cell facilities in Ethiopia.
FEOC compliance
Prices for Foreign Entity of Concern (FEOC) non-compliant panels fell 15.91% quarter-over-quarter to $0.362 per watt as buyers cleared out non-qualifying inventory. Concurrently, demand for fully FEOC-compliant equipment reached record highs.
In cell technology, TOPCon transaction prices rebounded 4.60% to $0.355 per watt, while legacy PERC dropped 2.92% to $0.357 per watt, resolving the previous price inversion. Reduced patent litigation risks surrounding TOPCon supply helped stabilize buyer confidence. Among suppliers, JA Solar took the top spot in transaction volume, followed by Regitec and SolarSpace. Canadian Solar entered the top rankings at #8, while Seraphim moved up to #10.
Inventory and upstream
Average daily listed inventory reached 932,000 units (491 MW) in Q2 2026, up 126% from Q1, as importers positioned stock ahead of tariff changes and the July 24 transition from Section 122 to Section 301 forced-labor provisions. Wholesale lead times held steady at 9 days.
Upstream raw material markets saw notable price swings:
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