U.S.-made solar panel demand falls to record low as Treasury rules tighten

U.S.-made solar panel demand dropped to 1 in 10 in Q2 2026, the weakest reading in two years of A1 SolarStore tracking, as new Treasury guidance disqualified most panels that did not source ingots and wafers in the United States. The report says the policy shift lowered domestic-panel prices, squeezed buyer leverage and left import inventories near record levels.

Why it matters: - The latest A1 Solar Index shows federal policy is reshaping the U.S. solar market faster than domestic manufacturing can respond. - A narrower definition of “domestic” solar panels has made many U.S.-labeled products ineligible, even as Washington is trying to steer buyers toward American-made supply. - The result is weaker demand for domestic panels, lower prices in that category, and a market still filled by imports despite tariffs above 200% on Chinese modules.

What happened: - U.S.-made solar panel demand fell to 1 in 10 in Q2 2026, the lowest level A1 SolarStore has recorded since it began tracking the market two years ago. - New Treasury guidance requires the underlying ingot and wafer to be produced on U.S. soil for a panel to qualify as domestic. - That change disqualified most panels still carrying a “US-Made” label. - The Q2 2026 A1 Solar Index also found domestic-panel prices fell 8.87% in a single quarter. - Combined tariffs on Chinese solar modules stayed above 200% of product value for a fifth straight quarter. - Alexey Kruglov, chief executive officer of A1 SolarStore, said: “The irony is hard to miss. Policy is designed to push buyers toward domestic product, but this quarter it did the opposite — disqualifying supply faster than U.S. manufacturing can replace it.”

The details: - Retail buyers lost much of their negotiating leverage in Q2. - The gap between listing price and transaction price narrowed from $0.118/W in Q1 to $0.054/W in Q2. - That pricing spread converged with wholesale terms. - The 600W+ segment flipped from a $0.004/W discount in Q1 to a $0.138/W premium in Q2. - Commercial EPCs raced to secure compliant, high-wattage supply ahead of the July 4 investment tax credit deadline. - Solar panel inventory nearly doubled quarter over quarter. - Inventory ended within 10% of the market’s all-time high as importers stocked up ahead of the July tariff and ITC deadlines. - The Q2 2026 A1 Solar Index measures market health using price stability at 40%, inventory levels at 30% and demand change at 30%. - The index uses real buyer transactions, not surveys or forecasts. - Full pricing, inventory and regional demand data are included in the full Q2 2026 report.

Between the lines: - The report suggests policy is tightening compliance rules faster than supply chains can adapt. - That creates a gap between political support for domestic sourcing and the practical availability of panels that meet the new standard. - The tariff wall has not removed import pressure because buyers are still stocking ahead of deadlines. - The premium on 600W+ panels signals urgency in the commercial market, where deadline-driven procurement can override normal pricing patterns.

What's next: - A1 SolarStore expects pricing and demand to keep reacting to Treasury rules, tariff timing and tax credit deadlines. - The company’s quarterly index will continue tracking transactions, inventory and regional demand in future releases. - Market participants will be watching whether U.S. manufacturing can expand fast enough to replace panels that no longer qualify as domestic.

The bottom line: - The policy push for “Buy American” solar is colliding with supply-chain reality, and Q2 2026 showed the sharpest disconnect yet.**