The Shifting Landscape of the Solar Energy Market: A Deep Dive into Domestic vs. International Content Supply

The solar energy industry is in a constant state of flux, shaped by a complex interplay of market forces, technological advancements, and policy shifts. For stakeholders across the value chain-from developers and original equipment manufacturers (OEMs) to utilities and investors-navigating this dynamic environment is crucial for success. As a consultant specializing in market strategy, supply chain, finance, and policy within the renewable energy sector, I partner with these key players to decipher the intricate trends and forge pathways to sustainable growth. This post delves into the current market dynamics, with a particular focus on the burgeoning domestic solar industry in the United States and its relationship with the international market.

The Pulse of the Market: Pricing, Pipelines, and Competition

The U.S. solar market in 2025 is a tale of volatility and growth. Module prices, a key indicator of market health, have been on a rollercoaster ride. After a significant 12% increase from February to May, driven by new tariff shocks, prices saw a ~3.5% softening in June. This price fluctuation underscores the market's sensitivity to trade policy and its impact on project economics.

Despite price volatility, the installation pipeline remains robust. In 2024, the U.S. installed approximately 26.3 GWac (around 32 GWdc) of photovoltaic (PV) capacity, with the utility and residential sectors leading the charge. This growth is a testament to the increasing demand for clean energy, spurred by favorable policies and growing consumer awareness.

The competitive landscape is equally dynamic. In the residential sector, leading players are competing fiercely on customer acquisition and innovative financing models. On the utility side, developers are grappling with significant hurdles, including grid interconnection queues and permitting constraints, which have become major battlegrounds.

The "Made-in-America" Solar Boom: Supply and Demand for U.S. Modules

The passage of the Inflation Reduction Act (IRA) catalyzed a renaissance in American clean energy manufacturing. Since the IRA's enactment, over $40 billion in investments have been announced in the clean energy sector, with a significant portion dedicated to solar manufacturing.

However, this surge in domestic supply is still racing to catch up with a voracious appetite for solar energy. U.S. demand, fueled by federal tax credits and ambitious state-level renewable energy targets, continues to outpace domestic production. Consequently, many projects still rely on imported modules to fill the gap.

This mismatch between domestic supply and demand highlights several critical bottlenecks in the U.S. solar supply chain. Even if domestic plants operate at full capacity, there may be limited flexibility to respond to demand surges. Lead times for equipment, the pace of technology upgrades, and the availability of key raw materials like polysilicon and wafers remain significant challenges.

Policy's Long Shadow: From the IRA to the "OBBB"

The solar industry is intrinsically linked to policy. While the administration's initial tariffs (Section 201, anti-dumping) raised costs and created uncertainty, many of these are now baked into price expectations. The more critical pivot has been the recent legislative shift with the passage of the "One Big Beautiful Bill" (OBBB, also known as H.R. 1), which significantly alters the landscape created by the Inflation Reduction Act.

This new legislation has introduced a period of profound uncertainty by rolling back many of the foundational incentives that fueled the recent clean energy boom. Key provisions of the OBBB that directly impact the solar industry include:

• Accelerated Tax Credit Phase-Out: The bill dramatically shortens the timeline for the clean electricity Production Tax Credit (PTC) and Investment Tax Credit (ITC). Solar and wind projects now face a much tighter window, needing to begin construction by mid-2026 or be placed in service by the end of 2027 to qualify for credits that were previously expected to last well into the next decade.

  
  

• Supply Chain Restrictions: The legislation imposes new restrictions related to "Foreign Entities of Concern" (FEOCs). Given the global dominance of Chinese companies in the solar supply chain, these rules could severely limit the ability of U.S. projects to source critical components and materials, creating significant procurement challenges.

  
  

• Impact on Residential Solar: The OBBB also eliminates or phases out critical residential solar credits, such as the 30% tax credit for homeowners (25D). This will likely increase the upfront cost of residential solar, potentially slowing adoption in a key market segment.

  
  

This abrupt policy reversal threatens to stall the momentum of domestic manufacturing investments and could lead to project cancellations, job losses, and a slowdown in the U.S. energy transition. To navigate this new landscape, scenario modeling becomes even more critical. Evaluating the upside and downside under these new rules and advising on buffer strategies like dual sourcing and tariff mitigation will be essential for survival and success.

A Tale of Two Prices: U.S. vs. International Module Pricing

A significant pricing disparity exists between domestically produced and imported solar modules. Historically, global spot prices for modules have been in the range of $0.10–$0.15 per watt, undercutting U.S. domestic prices. Currently, U.S.-manufactured modules command a substantial premium, with median prices around $0.49 per watt compared to approximately $0.255 per watt for imported modules.

Recent tariff actions in 2025 have exerted further upward pressure on domestic list pricing, contributing to the ~12% increase seen earlier in the year. This pricing environment presents a challenge for domestic producers, who must continuously balance scale, automation, and technological innovation to remain competitive with lower-cost imports.

In any deal scenario, a thorough analysis of the "import plus tariff" versus the "domestic plus logistics premium" is essential.

By modeling these scenarios and computing breakeven thresholds, we can assess the sensitivity to variables like freight costs, currency fluctuations, and tariffs, providing a clear-eyed view of the most cost-effective procurement strategy.

The New Wave of Domestic Supply: A Closer Look at What's Coming

The post-IRA era has seen a flurry of announcements for new or expanded U.S. module plants. More than a dozen such facilities are in various stages of development, many of them located in states with favorable incentives and strong political alignment with the clean energy transition.

A prime example of this trend is the partnership between T1 Energy and Corning to build a fully domestic supply chain, from wafers and cells to finished panels, with facilities in Michigan and Texas slated to come online by 2026.

However, the journey from announcement to full-scale production is fraught with risks. "Coming online" is not a simple flip of a switch. Potential hurdles include ramp-up delays, initial sub-par yields, capital constraints, and bottlenecks in the feedstock supply chain for essential materials like silicon and wafers. A strategic roadmap that maps the realistic production timelines of these new plants against demand curves is crucial for identifying potential gaps or windows of oversupply in the market.

The Oversupply Question: A Balancing Act for the U.S. Market

In the short term (2025–2026), there is a tangible risk of oversupply in the U.S. solar market. This risk is compounded by several factors, including the potential for demand to soften due to high interest rates, persistent grid interconnection delays, and a cumbersome permitting process. If the numerous domestic plants currently under development ramp up faster than demand growth, or if policy incentives are not extended or are tightened, module pricing could face significant downward pressure.

To mitigate this risk, proactive and strategic measures are necessary. Flexible contracts, such as take-or-pay agreements and off-take contracts with penalties, can provide a degree of certainty. Market segmentation, including a focus on exporting to international markets or targeting niche premium segments with high-reliability modules and extended warranties, can also help to absorb excess supply. Additionally, a staged ramp-up of production, with a front-loading of capital in automation to reduce long-term costs, can provide the flexibility to adapt to changing market conditions.

For a comprehensive long-term strategy, a detailed supply-demand projection out to 2030, under multiple scenarios, is invaluable. Such a projection can guide decisions on the timing of plant ramps and scale-backs, ensuring that supply remains in balance with demand.

Conclusion

While the U.S. is making significant strides in increasing its domestic solar manufacturing capacity, achieving complete self-sufficiency in the near term is unlikely. The global solar supply chain is highly interconnected, and the U.S. will likely continue to rely on imports for certain components and materials for the foreseeable future. However, the current trend is toward a more resilient and geographically diverse solar supply chain, with a greater share of manufacturing located in the U.S. If you would like to understand various policy changes, demand and supply for domestic vs international supply, reach out to us at contact@quantiedge.com or contact via QuantiEdge.com

About the Author

Sanjay Bhatia is a strategic advisor and execution partner to leading solar installers (residential and C&I), inverter and battery OEMs, and energy investors, with deep expertise across Home Energy Management Customer Facing Apps (iOS/ Android), Virtual Power Plants (VPPs), DERMS, Energy IoT, and TPO (PPA/Lease) models.

With a strong track record of working across both hardware and software domains, Sanjay has delivered results for various clients, investment analysts, and consulting firms. His projects have spanned:

• Hardware/software integration and fleet management

• VPP readiness and DERMS implementation

• Go-to-market strategy for energy OEMs

• Energy IoT data platforms and workflow automation

• Agentic AI tools for sales-ops and customer engagement and retention

  
  

Recently, Sanjay Bhatia has focused on helping early-stage and growth-stage energy companies build custom AI agents and IoT applications-turning untapped energy data into actionable intelligence and recurring revenue.

He is available to support on a contract, part-time, or full-time basis, and always open to collaborations at the intersection of renewables, storage, GenAI, Agentic AI, energy IoT, and grid software. Reach out to Sanjay Bhatia directly at sanjay.bhatia@quantiedge.com