Solar power is having another strong year in the US, solidifying its position as the country's leading source of new generating capacity amid rising demand for electricity.
But as construction activity accelerated over the summer, partly in response to expiring federal tax credits, the sector's stock prices plummeted.
An index of select US-listed solar equipment suppliers compiled by Platts, part of S&P Global Energy, lost nearly 20% in the first eight months of 2026, reversing course in June after being up over 40%.
The valuations of a broad cross-section of companies have shrunk significantly, even though most of them beat Wall Street's top- and bottom-line expectations in the second quarter and some companies reported record order backlogs.
"It's not a surprise to me," Array Technologies Inc. CEO Kevin Hostetler told Platts. "I think what Wall Street wants is predictability, and it's not about our underlying predictability and performance. ... We're in a 'beat and raise' mode at this point."
In early August, the supplier of solar tracking and fixed-tilt mounting systems reported second-quarter income and revenue results that broadly beat S&P Capital IQ consensus estimates.
Some analysts cited the company's tepid third-quarter outlook as a concern, but Hostetler is confident that a strong fourth quarter can help Array reach its full-year revenue forecast of $1.4 billion to $1.5 billion.
"We've delivered those quarters in the past multiple times, so we're not as concerned," Hostetler said. "I think the overhang is, you're in an environment where things can change with the stroke of a pen, or an executive order from the White House."
Over the summer, amid a flurry of federal actions affecting the solar industry, Array advanced its acquisition strategy focused on "technical interoperability," the CEO said, in part to streamline installations for clients with tight timelines.
On Aug. 31, Array closed its $203 million acquisition of Affordable Wire Management LLC, extending its balance-of-system solutions into high-demand battery storage and data center segments and improving its prospects for future profits. The deal builds on Array's 2025 purchase of AP Alternatives LLC, known as APA Solar, a provider of engineered foundation solutions and fixed-tilt systems.
But equity investors have remained cautious on Array and the sector following recent federal moves.
Array is one of several solar companies that have lost about half of their market value so far this year, a list that also includes residential solar and storage supplier Sunrun Inc. and photovoltaic-module makers JinkoSolar Holding Co. Ltd. and Canadian Solar Inc.
The market values of thin-film panel producer First Solar Inc. and Array peer Nextpower Inc., the two largest US-listed solar companies by market capitalization, have also slid significantly since June.
'Competitive pressures'
Among the federal actions affecting the industry over the summer, President Donald Trump set price floors Aug. 6 on imports of crystalline-silicon solar panel materials and components, citing national security concerns and the need to revitalize domestic manufacturing. Trump also imposed a new 15% tariff on imported polysilicon.
The moves, in response to a Commerce Department investigation under Section 232 of the Trade Expansion Act of 1962, generated mixed reactions from industry participants and analysts.
Analysts at BNP Paribas cut their forecast for US utility-scale solar additions through 2030 but deemed First Solar as the biggest winner.
First Solar's stock, however, has lost momentum in the wake of Trump's announcement and is down about a quarter year to date.
Trump's actions "will accelerate US domestic supply chain alternatives to [First Solar], ratcheting up competitive pressures," Jefferies analysts said in an Aug. 24 note.
One such alternative could be growing Texas PV panel and cell company T1 Energy Inc.
"We believe [T1 Energy] is a key beneficiary of [Section 232] given its domestic manufacturing/relationship with the Trump administration," Philip Shen of Roth Capital Partners said in an Aug. 14 note.
On T1 Energy's second-quarter earnings call, executives said the company was aligned with the new federal framework.
"We believe we are witnessing the beginnings of a major American solar manufacturing industry," CEO Daniel Barcelo told analysts.
But the biggest potential disruptor for First Solar and other US module-makers is Tesla Inc., according to Jefferies.
The diversifying electric vehicle and energy storage supplier is pursing a potential 100-gigawatt/year integrated PV production complex in Texas, which would make a variety of components including polysilicon and panels.
In a recent social media post, CEO Elon Musk indicated that his rocket company Space Exploration Technologies Corp., known as SpaceX, would separately set up an additional 100 GW of annual solar panel production capacity.
That would be "meaningfully negative" for First Solar and peers, Jefferies analysts said in a Sept. 1 note.
Uncertainties, opportunities
Regardless of Tesla's plans, much uncertainty surrounds the domestic solar supply chain, with the industry still awaiting additional guidance on foreign entities of concern (FEOC) restrictions that determine supply-chain eligibility for tax credits.
Those uncertainties have deeply affected international panel suppliers active in the US.
China-based JinkoSolar in late August reported mixed second-quarter results, cut its panel supply outlook for 2026 and announced the resignation of its CEO.
Although many of its challenges relate to policy changes in China, the manufacturer also has had to adapt to the US crackdown on foreign solar materials, equipment and ownership. This year, JinkoSolar sold a majority stake of its US subsidiary Jinko Solar (US) Industries Inc. to private equity firm FH Capital to align with the US policy landscape, particularly FEOC restrictions.
Canadian Solar also made FEOC compliance adjustments with the creation of joint venture CS PowerTech. Canadian Solar continues to expand its manufacturing footprint in the US as it opened the first phase of its heterojunction solar cell factory in July in Jeffersonville, Indiana.
Canadian Solar on Aug. 27 reported mixed second-quarter results, with a GAAP net loss more than triple the Capital IQ consensus estimate.
"Profitability was impacted by elevated freight costs from ongoing geopolitical uncertainties," CEO Colin Parkin told analysts. "We also face near-term ramp-up costs for our solar cell manufacturing facility in Jeffersonville."
But some US manufacturers of power electronics for renewable energy projects stand to benefit from the Federal Communication Commission's July 28 ban on foreign-made inverters over national security concerns.
Shen, in a July 29 note, called the move "incrementally positive" for distributed energy companies Enphase Energy Inc. and SolarEdge Technologies Inc., as well as Nextpower, which is expanding into utility-scale inverters.
Like other solar stocks, the shares of Enphase and SolarEdge have strongly declined since June. Unlike most others, both stocks have gained modestly year to date.
'Right spirit in mind'
While the solar industry is adapting to policy changes under the second Trump administration, companies are challenged to keep up.
Trump's Aug. 26 executive order on risks to the US power system from foreign-produced equipment could introduce more prohibitions and complication for the industry.
"We still have to figure that one [out]," said Array's Hostetler, noting that companies are working with the administration to understand the order during a comment period.
The CEO credits the Trump administration for having "the right spirit in mind" with its actions to bring manufacturing back to the US, pointing to a new Array factory in Albuquerque, New Mexico.
But some recent actions "are more confusing" and "create pause in the industry," Hostetler added. "It's really hard to put your finance model together without understanding your core input costs."