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The so-called One Big Beautiful Bill Act (OBBBA), passed in July 2025, eliminated the 30% investment tax credit for residential systems installed after 31 December 2025.
The deadline prompted what EnergySage said was one of the largest demand surges the US industry has ever seen.
Pricing and procurement
As a result, EnergySage said most US installers reported reaching annual capacity by October 2025, creating supply constraints that tested the market’s resilience and affected pricing and equipment purchasing behaviour
On pricing, despite the US residential energy market experiencing what EnergySage described as “one of the most disruptive six-month periods in its history”, the impact was only “modest”, its report said.
Before October 2025, solar prices were at an all-time low of US$2.47/W as installers rushed to sign contracts before the tax credit’s expiry. In Q4, when most installers had reached capacity, prices rose only slightly to US$2.50/W. The fact that competitive pricing persisted suggested marketplace transparency limited price inflation, EnergySage said.
“When demand outweighs supply, that often results in panic pricing within any industry,” said Emily Walker, director of Insights at EnergySage. “But marketplace transparency acted as a check on inflation: when buyers can see what competitive pricing looks like, it’s hard for costs to spiral, even under historic demand.”
The tax credit deadline also affected procurement behaviour, with panel wattages falling for the first time in years as installers prioritised available equipment over ideal specifications.
EnergySage said the 450-460 W range of modules that has dominated recently dropped from 33% to 26% of quotes, while the 430-440 W range jumped from 8% to 30%. The market share of REC, the consistent PV module leader on EnergySage, fell from 43% to 20%.
“Installers and homeowners became far more flexible about equipment to hit the tax credit deadline,” Walker said. “Getting installed before the cut-off mattered more than system preference, opening up opportunities for alternative solar panel brands and models to gain share.”
Battery adoption fell
Home battery adoption also took a hit due to the tax credit cut-off.
EnergySage said the second half of 2025 saw the level of battery attachment to residential PV systems fall from 41% to 38%, as homeowners prioritised securing solar incentives over investing in storage. This was even more pronounced in high-value storage markets such as California and Texas, where battery attachment rates fell from 79% to 71% and 61% to 53% respectively.
However, interest in storage fell only marginally, from 74% to 73%, suggesting homeowners are deferring storage investments for now.
“The dip in battery attachment wasn’t reduced interest—it was deferred adoption,” said EnergySage’s director of insights, Emily Walker. “Thousands of new solar households are now prime candidates for storage retrofits, and that wave is just beginning.”
The post-incentive era
As the US residential energy market now enters a post-incentive phase for purchased solar systems, EnergySage said financing flexibility, product diversification and operational adaptability will determine long-term competitivenes
Already, third-party ownership (TPO) options such as leases and power purchase agreements (PPAs), which remain eligible for the tax credit until 2028, are becoming more popular and gaining share on EnergySage.
“Federal incentives spent decades kickstarting the home electrification market, and they succeeded,” said Naman Trivedi, group CEO of EnergySage and VP of home energy at Schneider Electric. “But the forces shaping the next chapter are bigger and more durable—unprecedented electricity demand, rising utility rates, extreme weather, and grid strain are all resulting in the desire for energy independence. Homeowners are increasingly motivated by savings, resilience, and control, and that combination is more powerful than any single incentive.
“We’re moving from an incentive-driven point-solution market to an integrated home energy market. The companies that succeed will be the ones that help households manage energy, not just install equipment.”
EnergySage’s H2 2025 ‘Home Electrification Marketplace Report’ is available here.