⚡ Quick Read
The US residential solar market is undergoing a significant transition following the expiration of the 30% federal residential solar tax credit at the end of 2025. According to the 23rd Home Electrification Marketplace Report by EnergySage, the market has responded to this policy shift with a price adjustment, as stakeholders navigate the new economic landscape without the primary federal incentive that previously drove affordability.
In the first half (1H) of 2026, median US residential solar prices climbed to $2.57 per watt, representing a 3.2% increase compared to the second half of 2025. For a standard 12 kW residential installation, this adjustment brought the total cost to $30,712 before incentives. While solar-only pricing saw a marginal decline of 1%, solar-plus-storage installations experienced a 5% price hike, reaching $2.55/W. Battery storage costs also trended upward, rising 5% in 1H 2026 to $1,130/kWh, a figure 13% higher than the market low recorded in late 2024, driven by ongoing trade and supply chain constraints.
For solar developers and EPC contractors, the data underscores a critical shift in sales strategy. With 63% of contractors citing pricing as the primary driver of lost sales, the industry is pivoting toward flexible financing. The share of installers offering third-party ownership (TPO) options on the EnergySage platform surged from 14% to 41% within six months. Prepaid TPOs have become a vital tool, with prepaid leases and PPAs proving 39% and 57% cheaper than cash purchases respectively, allowing installers to maintain volume in a price-sensitive environment.
As grid electricity rates continue to climb due to aging infrastructure and increased electrification demand, the value proposition for residential storage is expected to strengthen. Developers should monitor the increasing battery attachment rates as homeowners seek to hedge against rising utility costs. While the US market dynamics differ from the India renewable energy sector, the focus on innovative financing models and storage integration provides valuable insights for Indian developers looking to scale residential and C&I solar segments as government subsidies evolve.
Aditya Pathre is the Founder of MVApulse and covers India’s renewable energy sector, including solar, wind, battery energy storage systems (BESS), green hydrogen, transmission infrastructure, renewable energy policy and competitive bidding. His reporting focuses on project developments, market trends, government policies and energy transition across India.
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