U.S. solar hardware market tightens as buyers race back-to-back tariff deadlines

The Q2 2026 A1 Solar Index report by distributor A1 SolarStore reveals a U.S. solar hardware market operating under significant regulatory constraints.

Inventory levels surged close to historic highs, driven primarily by importers rushing to beat incoming tariff deadlines and federal tax credit milestones rather than organic market demand. Tightened federal guidance and expanding import duties have further constrained low-cost supply chains, squeezing margins and leverage for retail buyers and large-scale developers alike.  

Domestic content

Demand for domestic-made solar panels fell sharply following updated Treasury and IRS guidelines for the Inflation Reduction Act’s domestic content bonus. The clarified rules require underlying ingot and wafer production, not just cell coating and module assembly, to take place in the U.S. Transaction prices for domestic panels corrected 8.87% quarter-over-quarter to $0.510 per watt as the pool of qualifying hardware narrowed. Despite the price reduction, domestic-made modules remain the highest-priced equipment segment in the report.

Pricing

Seller leverage increased during the quarter as negotiating room narrowed. The national retail price gap between listed ask prices and final checkout prices shrank from $0.118 per watt in Q1 to $0.054 per watt in Q2. In the 600W+ module category, listing discounts shifted to a $0.138 per watt premium ($0.500/W transaction versus $0.362/W listing) as commercial EPC firms secured available high-wattage, FEOC-compliant stock ahead of the July 4 Section 48E construction-start deadline.  

Import restrictions

Protectionist trade policies continue to limit alternative import channels. Cumulative tariffs on Chinese modules remained above 200%, maintained by the 50% Section 301 rate and the 10% Section 122 baseline.  

Preliminary antidumping and countervailing duty decisions issued on April 24, 2026, further restricted major Southeast Asian manufacturing hubs:  

• India: 126% preliminary CVD and 123% preliminary AD duty  
• Indonesia: 86% to 143% preliminary CVD and 35% preliminary AD duty  
• Laos: 81% preliminary CVD and 22% preliminary AD duty  

U.S. Customs is collecting cash deposits at the border for these duties, with retroactive critical circumstances applied to select Indian and Indonesian suppliers. In response, manufacturers are seeking alternative supply sources, including cell facilities in Ethiopia.  

FEOC compliance

Prices for Foreign Entity of Concern (FEOC) non-compliant panels fell 15.91% quarter-over-quarter to $0.362 per watt as buyers cleared out non-qualifying inventory. Concurrently, demand for fully FEOC-compliant equipment reached record highs.  

In cell technology, TOPCon transaction prices rebounded 4.60% to $0.355 per watt, while legacy PERC dropped 2.92% to $0.357 per watt, resolving the previous price inversion. Reduced patent litigation risks surrounding TOPCon supply helped stabilize buyer confidence. Among suppliers, JA Solar took the top spot in transaction volume, followed by Regitec and SolarSpace. Canadian Solar entered the top rankings at #8, while Seraphim moved up to #10.  

Inventory and upstream

Average daily listed inventory reached 932,000 units (491 MW) in Q2 2026, up 126% from Q1, as importers positioned stock ahead of tariff changes and the July 24 transition from Section 122 to Section 301 forced-labor provisions. Wholesale lead times held steady at 9 days.  

Upstream raw material markets saw notable price swings:  

• Polysilicon: Chinese n-type polysilicon dropped 25% to $4.86 per kg following factory recoveries and the removal of China’s 9% export VAT rebate. Non-Chinese compliant polysilicon remained near $19.20 per kg, maintaining a roughly 4x price premium for compliant supply.  
• Silver: Prices reached $86.79 per ounce in April due to geopolitical conditions before falling 22% in June to close near $58.80 per ounce.  
• Aluminum: Regional smelter disruptions pushed benchmark aluminum to $3,855 per metric ton in early June before prices pulled back 20% to close the quarter at $3,105.50 per metric ton.