AI and data centers: Demand dynamics
Discussions highlighted that solar’s role in powering AI and data centers appears to have moderated relative to expectations a few months ago. This “flat-to-declining” outlook reflects ongoing regulatory hurdles and uncertainty around the Inflation Reduction Act. Even so, solar is expected to remain a key contributor, particularly when paired with storage. With solar-plus-storage maintaining the lowest levelized cost of energy, even on an unsubsidized basis, renewables are viewed as a durable part of the energy mix. For hyperscalers, the primary value proposition remains speed, certainty, and scale, and they are generally willing to pay premiums if those needs are met.
U.S. utility-scale solar: Growth and cost pressures
The outlook for U.S. utility-scale solar remains bullish, with positive year-over-year growth expected through 2030. Module pricing for domestic content and non-FEOC compliant panels has risen significantly and may continue to increase into 2026. Tracker companies, meanwhile, are working to offset costs by optimizing supply chains, though the ability to maintain margins depends in part on Section 232 tariffs on steel and aluminum.
Auxin case: Potential industry-wide financial strain
Legal developments around the Auxin case represent a major overhang. The Court of International Trade issued a decision on August 22, 2025, and parties have until October 21, 2025, to appeal. Even if the court grants a stay, cash deposits or bonds totaling as much as $50 billion could still be required, creating potential liquidity stress across the solar supply chain. The financial implications could ripple across developers, EPCs, and module suppliers.
FEOC compliance and policy overhang
Compliance with Foreign Entity of Concern (FEOC) provisions is expected to become a decisive factor in project eligibility. Despite claims from some manufacturers, most Chinese companies are unlikely to meet compliance requirements by 2026. Policymakers have indicated that restructuring, ownership changes, or other maneuvers will not be sufficient if effective control, intellectual property, or operations remain tied to China. The intent of the legislation is clear: to strictly prevent Chinese firms from accessing U.S. tax credits.
An IRS notice addressing priority FEOC questions is expected later this year, but full guidance may not arrive until late 2026. One area of uncertainty is retroactivity. Current interpretation suggests that FEOC restrictions could apply retroactively to January 1, 2026, but not before, as the legislation specifies 2026 as the effective start date.
U.S. residential market: financing and demand trends
On the residential side, new financing structures are emerging. Two third-party ownership providers are reportedly preparing to launch prepaid lease programs in the near term, broadening options for installers and customers. Meanwhile, most market participants continue to access domestic content-compliant equipment, though the “domestic content buster” package remains constrained. Looking ahead, U.S. distributors are expected to begin slowing purchases of inverters and other equipment later this month and into October, reflecting a more cautious approach to near-term demand.
Conclusion
ROTH’s Solar Symposium underscored that while U.S. solar and storage face near-term headwinds -ranging from policy uncertainty and trade cases to rising equipment costs – the sector retains strong growth potential. Utility-scale activity is projected to expand through the end of the decade, residential markets are experimenting with new financing models, and solar-plus-storage continues to offer the most competitive economics across the grid. Ultimately, the ability to deliver speed, certainty, and scale will determine which companies emerge as leaders in the next phase of deployment.
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