Video: Resetting the solar market in 2026 | Power Forward!
Last year was a tumultuous year for the solar industry as Congress voted to claw back tax credits. With the 25D residential solar tax credit ending in December and the ITC ending this summer, installers are looking at a new landscape in 2026 and beyond. On Power Forward!, Solar Builder editor Brad Kramer discusses resetting the solar market in 2026 with David Dunlap, VP of product strategy at BayWa r.e.
- 00:55 Where the solar market stands today
- 03:09 Biggest changes impacting the market in 2026
- 06:14 Understanding your options in this new landscape
- 09:42 Biggest challenges facing solar installers today
- 14:18 Reasons for hope in today’s solar market
- 15:53 How to take back control of your solar business
Where the solar market stands today
Kramer: We’re already about a quarter of the way through the year. What is your assessment of where the solar market stands today?
Dunlap: It seems like this year has both been a challenge and kind of a slow start, but also it’s kind of amazing we’re three months in. Talking to our customer base, our installer base definitely feels like there was a pretty big hangover, a 25D residential hangover at the end of the year, and plenty of folks had a backlog of installations that they weren’t able to get done on time as they had planned. And so we’re spending a lot of the first, I would say 6-8 weeks of the year, trying to clear that backlog and settle down to figure out what comes next. And of course, we had some pretty significant winter storm challenges throughout the Midwest and the Northeast that definitely slowed things down quite a bit. Our finance partners told us that there were plenty of originations in the funnel, but the install rate was slow. So I think all of those signs together kind of indicate what most of us probably are feeling, which is that 2026 is off to a bit of a slower start than folks would hope.
Understanding the new landscape
Kramer: How do solar installers move forward? How do they best understand their options in this new landscape?
Dunlap: There’s a lot of new rules, but I hear a lot of people stumbling over rules that actually don’t apply to them because of some other choice that they’ve already made. I’ll give you a great for instance. With the removal of 25D, there is no direct-to-homeowner tax credit available, right? For a solar contractor that is offering a homeowner an installed system, there is no federal tax strings attached to that project if they’re going to do a cash and loan sale. What that means is all the noise and the confusion and the challenge around is this company FEOC compliant? Is the product coming from a non-FEOC country? What is the IP of the product? Does it have domestic content? These are buzzwords. We’re all talking about them. They seem like the most important thing in our industry ever. They’re all tied to those federal tax dollars, right? So, if you’re looking at funding a project that does not involve any federal tax dollars, none of that matters.
And just coming off of the NABCEP show in February in Wisconsin, there are a lot of installers in that market and throughout the Midwest that leases are not an option. So, they really aren’t doing third-party owned financing of any kind, and they get this cash and loan project. It’s just about the direct project cost, whatever equipment I can find and put in. They’re going for, I don’t want to devalue it and say the lowest cost on the equipment, but they’re going for cost effective, reliable equipment. That doesn’t have to meet all these other requirements, all these other bars.
So, if you as an installer or listener are trying to figure out how do I do this FEOC, non-FEOC or domestic content. First question I want everyone to ask themselves is, am I using a third-party owned product that’s tied to a tax credit? If the answer is no and you’re just doing cash and loan, you don’t need to worry about that. That’s not part of the equation. You can just choose your favorite brand, the reliable, good warranty, good service. You are familiar with the product. Just do that. Get back to running your business the way you want to run it.
Taking back control
Kramer: What are some key tools that installers can use to take back control of their business in 2026?
Dunlap: That’s a great question. And maybe before tools, it’s just acknowledging that’s a choice a business owner can make is I think a lot of people are used to making their own decisions about their business. And maybe right now part of the frustration, part of the fear or concern is I don’t feel like I’m making my own business decisions. I feel like I’m being told what to do by somebody else, right? By the federal government on these policies, or by the rules for the ITC. Or it’s I’m being told what to do by the finance companies. I have to meet the AVL and I have to buy these products. Well, I don’t want to use those products. I want to use something else.
So I think the first tool is take a breath, assess your business and ask yourself those tough questions. Am I running the business that I want to run in today’s climate? And if not, why not take some time to chat with friends and colleagues and your professionals that are in your orbit and ask some of those tough questions. Could I be operating differently in this time today? Can I be successful doing XYZ, right? Look around, compare notes with similar companies to yours in other markets where you’re not competing with them. What do you see other installers doing?
This is one of the things that BayWa loves to do is to bring our installers together, meet each other, compare notes like this, and I invite everyone to reach out to their network. Everybody has an extensive network of professionals that they can lean on and ask these questions. But I think it’s back to basics, right? Why does solar matter for my business? How am I presenting it at the kitchen table? Or at the conference room table, if you’re doing commercial.
I think it starts with a vision and some of the basic tools maybe that you used when you started your business. What kind of a solar business do I want to to build? Why did I get into it and what what’s important to me? And maybe you’re not going to take all of those things back under your control right away, but what’s one thing that can make you really proud of the business that you’re running today and feel like you’re in control again? I think it’s also a time to be a little bit conservative in your projections. I don’t think that anybody is really forecasting that they’re going to double their business this year. I think most people acknowledge that this is a little bit of a recovery year, and that’s OK. As long as we can stay sustainable and profitable and be on a good path, we’ll make it through the other side.
Check out the Power Forward! series on Solar Builder‘s YouTube channel.
