Solar Electric Power NAICS 221114

May 7, 2026 - Solar Developers Rush to "Safe Harbor" Projects

• The US utility-scale solar industry is undergoing an unprecedented surge in “safe harboring” as developers rush to secure tax incentives tied to the Inflation Reduction Act and the One Big Beautiful Bill Act, according to Solar Quarter. Analysts estimate that 216 to 240 gigawatts of direct current (GWdc) capacity will be preserved before the July 2026 deadline, enough to cover projected installations through the end of the decade. However, stricter IRS rules, foreign entity restrictions, and supply chain constraints are increasing project risk and complexity. Delays tied to transformers, interconnection, and financing may limit final totals. Projects starting after mid-2026 face steep hurdles in meeting timelines for the 30% Investment Tax Credit. The shift signals a turning point, as utility-scale solar developers increasingly rely on project economics rather than incentives, favoring larger firms and accelerating industry consolidation.
• In April, Republican lawmakers in the House introduced the American Energy Dominance Act to restore clean energy tax credits scaled back by the One Big Beautiful Bill Act, including the 45Y production and 48E investment credits, according to Utility Dive. The bill would remove accelerated phaseout deadlines and reinstate incentives, such as the 179D energy efficiency credit, without expiration, aiming to stabilize long-term project planning. Industry groups warn that shortened timelines have already contributed to $34.8 billion in canceled clean energy investments in 2025, raising risks for large solar deployments. While analysts say the measure is unlikely to advance in the current Congress, it could gain traction after the 2026 elections, offering potential relief to utility-scale solar developers, manufacturers, and related supply chains.

• Rising US demand for electricity will mostly be driven by increases in utility-scale solar generation, according to the US Energy Information Administration (EIA). Solar generation is forecast to increase 17% in 2026 and another 23% in 2027. Much of the growth will be in Texas, as the amount of solar electricity supplied to the grid by the Electric Reliability Council of Texas (ERCOT) is expected to increase from 56 billion kilowatt-hours (BkWh) in 2025 to 106 BkWh in 2027. Total US utility-scale solar generation is forecast to rise from 290 BkWh in 2025 to 424 BkWh by 2027. Solar's share of total US electricity generation capacity is forecast to rise from 7% in 2025 to 8% in 2026 and 9% in 2027.
• Prices for solar and wind power purchase agreements in North America each rose nearly 9% in 2025, reflecting growing electricity demand and supply constraints across energy markets, according to LevelTen Energy and reporting by Utility Dive. Some of the sharpest price increases were in the ERCOT market, where wind agreements rose 19% year over year. Analysts say expanding data center development and broader electrification are driving strong demand for renewable power, contributing to rising contract prices and ongoing pressure on energy infrastructure. Uncertainty around tariffs, supply chain rules, and federal permitting changes has also delayed some renewable projects and raised development costs. For the renewable energy development industry, the trends point to continued demand for new projects despite policy and cost challenges. Analysts also noted growing interest in battery storage agreements as energy buyers seek faster deployment timelines and additional grid capacity to support rising electricity consumption.