Solar Electric Power NAICS 221114

Jul 7, 2026 - Renewables to Post Solid Growth, Despite Headwinds

• FMI's 2026 Energy and Power Overview reports that construction of renewable and alternative power projects is expected to grow at an 8.7% CAGR from 2026 to 2030, led by utility-scale solar and battery storage. Solar remains the dominant source of new renewable capacity because of its low cost and relatively fast deployment. US solar additions reached about 30 GW in 2024, rose by another 29 GW in 2025, and are forecast to average about 25 GW per year through 2030. However, solar developers face growing headwinds from the phaseout of wind and solar tax credits under the One Big Beautiful Bill Act, solar module tariffs, expanded foreign entity rules, and persistent permitting delays. Battery storage growth should support solar deployment, but interconnection bottlenecks and policy uncertainty could slow some projects.
• A recent report by the Solar Energy Industries Association (SEIA) and Wood Mackenzie said the US added 7.8 gigawatts of solar capacity in the first quarter of 2026, with solar remaining the top source of new power added to the grid. Solar and storage accounted for 91% of new capacity installed in Q1, supported by demand for fast-to-deploy power, energy security, and insulation from fuel price volatility. Utility-scale solar contracts rose 15% year over year, driven in part by tech companies seeking power to meet AI-related electricity demand. However, permitting delays and policy shifts continue to pose challenges, and Wood Mackenzie expects US solar additions to be flat over the next five years.

• Wind and solar developers have safe-harbored a large pipeline of projects ahead of the One Big Beautiful Bill Act's July 4, 2026, deadline to qualify for Inflation Reduction Act tax credits, according to Utility Dive. Tax-credit marketplace operator Crux estimated in February that 170 GW of projects had been safe-harbored, a total that industry experts said has likely grown since then. Projects that miss the deadline will struggle to qualify before an end-of-2027 placed-in-service cutoff, which could push future power purchase agreement prices (PPA) higher as developers seek to offset the loss of tax credits. Camelot Energy Group estimated that a 200-MW solar project without a 30% investment tax credit would require PPA pricing in the mid-to-high $60s per megawatt-hour, about 50% above a tax-advantaged project.
• 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.