It’s been a rough year for the rooftop solar business. The Trump administration passed a measure last year that phased out the main federal tax credit for rooftop solar. It also imposed tariffs on imported photovoltaic panels and other parts. These policy changes have led to significant decreases in sales for installers. Estimates are that new residential solar generating capacity will fall 21% this year compared to 2025. That is a big enough drop to put many U.S. solar companies out of business altogether and to force the remaining companies to slash costs.
When the bill phasing out solar tax credits was signed last year, residential buyers had until the end of the year to get projects installed to qualify for the credits. Businesses could still qualify for the credits well into this year.
Solar installation companies employed about 179,000 people in 2024, nearly half of whom install residential systems.
In the bigger picture, the median installed price of rooftop solar has fallen substantially as a result of production efficiency and other factors. In 2001, the inflation-adjusted price of solar was $15.72 per watt; in 2025, it was $3.62 a watt.
Many in the business are still optimistic because electricity prices are continuing to rise and people are increasingly concerned about the expansion of data centers impacting the reliability of the grid. Mostly, the industry would like to see greater stability and predictability in policies, and it is unclear when or whether that might happen.
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Rooftop Solar Is Having a Rough One
