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					</table>The solar and energy storage markets in the U.S. have entered a phase of uncertainty in the first quarter (Q1) of 2026, as several policy developments began directly influencing pricing, procurement strategies, and supply chains, according to <a href="https://www.anzarenewables.com/" target="_blank" rel="noopener">Anza’s</a> Q1 2026 Quarterly Pricing, Foreign Entity of Concern (FEOC) Compliance, and Domestic Content Report.
Solar Module Prices Remain Flat
Solar module prices remained largely flat at around $0.285/W. Imported modules held steady at $0.265/W, reflecting continued global overcapacity, but domestically linked products saw sharp price increases.
Mono PERC modules recorded a 20% surge to $0.33/W, overtaking TOPCon pricing for the first time. This shift is attributed to strong demand for domestically manufactured modules ahead of the July 3, 2026, Investment Tax Credit (ITC) Safe Harbor deadline.
In contrast, TOPCon prices remained stable at $0.28/W, while HJT modules hovered near $0.385/W.
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-92995 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2.png" alt="Anza report 2" width="809" height="454" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2.png 809w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2-300x168.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2-768x431.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2-650x365.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2-624x350.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2-600x337.png 600w" sizes="auto, (max-width: 809px) 100vw, 809px" /></a>
In November, the market looked normal, with Mono PERC at $0.275/W, TOPCon at $0.285/W, and HJT at $0.39/W. By February, it changed dramatically, with PERC at $0.33/W (+20%), TOPCon at $0.28/W (-2%), and HJT at $0.385/W (-2%).
Domestic Manufacturing 
The report highlights a widening pricing gap between domestic and international supply chains. U.S.-made solar cells reached $0.49/W, while modules assembled domestically using imported cells rose to $0.325/W. Fully imported modules, however, remained flat.
This divergence reflects growing demand for domestic content to qualify for incentives, even as supply remains constrained.
Anza expects further expansion in domestic manufacturing, with three additional U.S. cell suppliers likely to come online by end-2026, taking the total to 15.
Policy Actions Increase Market Uncertainty
The quarter was marked by multiple policy developments, including a Section 337 investigation into TOPCon imports.
On March 26, 2026, the U.S. International Trade Commission <a href="https://www.mercomindia.com/usitc-opens-probe-into-topcon-solar-imports-for-patent-infringement" target="_blank" rel="noopener">voted</a> to institute an investigation into imports of TOPCon cells and modules. Petitioner First Solar has alleged patent infringement by multiple manufacturers and seeks a general exclusion order and cease-and-desist orders.
Another decision that <a href="https://www.mercomindia.com/us-hits-indian-solar-cells-with-126-preliminary-countervailing-duties" target="_blank" rel="noopener">affected</a> the market was the imposition of high anti-dumping and countervailing duties on imports from India, Indonesia, and Laos, with preliminary rates ranging from 80% to 143%.
Also, increased enforcement under the Uyghur Forced Labor Prevention Act and evolving Section 301 actions could further disrupt supply chains and increase costs.
FEOC Clarity Expands Supply
A key regulatory development in Q1 2026 was the updated Internal Revenue Service (IRS) guidance on FEOC compliance.
In Q1, the updated IRS guidance clarified core FEOC requirements. It confirmed that taxpayers can rely on existing Safe Harbor tables and supplier certifications, and that compliance at the solar cell level alone is sufficient to qualify as FEOC-compliant. While these changes broaden eligible options, tax equity investors are likely to continue applying more stringent verification standards in practice.
Currently, 78 out of 230 solar modules tracked by Anza met FEOC requirements.
Energy Storage 
The downward trend in the battery energy storage system pricing observed in the latter half of 2025 carried into Q1 2026.
Prices for utility-scale systems continued to decline significantly, while distributed generation (DG)-scale systems have largely stabilized, indicating a floor price in that segment.<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-4.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-92996 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-4.png" alt="Anza report 4" width="573" height="370" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-4.png 573w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-4-300x194.png 300w" sizes="auto, (max-width: 573px) 100vw, 573px" /></a>
In the energy storage segment, utility-scale battery systems continued to decline, with AC wrap prices falling to around $177-178/kWh and self-integrated systems to $145/kWh, marking declines of up to 20% from 2025 peaks.
However, DG-scale systems stabilized, with prices near $203/kWh, suggesting a potential floor price as suppliers prioritize larger projects.
Storage Faces Policy Risks 
Despite recent cost reductions, the storage sector faces mounting policy risks. Tariffs on active anode materials could add $8-$15/kWh, while China’s reduction in VAT export rebates is expected to increase costs by 3% in 2026 and by a further 3% in 2027.
Potential restrictions on Chinese inverters and new Section 232 investigations into batteries and grid equipment could further tighten supply and increase prices.
FEOC compliance in storage remains more challenging than in solar, with only 40% of products classified as low risk and over half as high risk.
At the same time, domestic manufacturing is scaling rapidly, with the number of U.S.-based battery cell suppliers expected to more than double from 6 in 2026 to 13 by 2027, improving long-term supply prospects.
Outlook for 2026
Key developments to watch in 2026 include the Section 232 polysilicon decision and the outcome of the TOPCon investigation, both of which could reshape pricing dynamics.
With the Safe Harbor deadline approaching, buyers are accelerating procurement decisions, particularly for domestic sourcing, while facing an uncertain future amid a changing tariff regime, compliance requirements, and supply chain risks.
The U.S. solar industry <a href="https://www.mercomindia.com/us-solar-industry-sees-14-yoy-decline-in-2025-with-43-2-gw-installed" target="_blank" rel="noopener">added</a> 43.2 GW of new capacity in 2025, a 14% decline from 2024, according to the U.S. Solar Market Insight 2025 Year in Review report released by Wood Mackenzie and the Solar Energy Industries Association. Even with the annual decline, solar remained the dominant source of new electricity generation, accounting for 54% of all new electricity-generating capacity added to the U.S. grid during the year.

US Energy Storage Costs Fall While Solar Market Suffers Under Policy Pressure

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					</table>A new <a href="https://www.cruxclimate.com/" target="_blank" rel="noopener">Crux</a> survey suggests the U.S. clean energy market is moving quickly on Foreign Entity of Concern (FEOC) compliance, but many firms still don’t feel ready for what is in store for 2026.
In an October 2025 survey of 50 developers, manufacturers, and other market participants, more than 90% said they have already begun some combination of ownership reviews, contract audits, and supply-chain mapping, yet only 38% described themselves as fully prepared for 2026.
The compliance push is being driven by the FEOC framework <a href="https://www.mercomindia.com/us-to-tighten-federal-review-of-solar-and-wind-energy-projects" target="_blank" rel="noopener">enacted</a> under the One Big Beautiful Bill, which ties eligibility for major clean energy incentives, including the clean electricity production tax credit (PTC) and investment tax credit (ITC) under Sections 45Y and 48E.
The Section 45X advanced manufacturing production tax credit is dependent on whether a taxpayer is a prohibited foreign entity (PFE), a PFE has effective control through contracts, or if the project’s supply chain exceeds material-assistance cost-ratio (MACR) limits.
Entity-level restrictions generally apply beginning with tax years after July 4, 2025, while MACR tests begin to bite for 45Y/48E projects that start construction after 2025 and for 45X components sold beginning in 2026.
Survey results indicate ownership exposure is not where most firms expect the biggest problems to emerge. Four in five respondents said they have no specified foreign entity (SFE) or foreign-influenced entity (FIE) ownership, and the remaining responses were concentrated below 25%, with a smaller slice reporting ownership below 40%.
Governance rights tied to foreign ownership also appeared uncommon, with fewer than 10% saying SFE/FIE owners can appoint officers or directors. Where ownership issues do exist, some firms reported mitigation steps such as resolving governance rights or liquidating SFE/FIE stakes.
Contracting, however, remains a key uncertainty, especially around the still-developing concept of effective control. Crux found that 54% of respondents reported no contracts at risk after their reviews, while 36% said reviews are still underway, 10% indicated they do have contracts that include effective-control payments to prohibited foreign entities (PFE).
Among those identified problematic payment provisions, roughly 80% said they plan to revise contract terms to remove effective-control elements, and some also flagged that certain agreements were signed before July 4, 2025, an issue expected to be addressed further in Treasury guidance.
A longer tail risk also looms for Section 48E. Beginning in 2028, an effective-control payment made within 10 years of a facility is placed in service can trigger full ITC recapture.
Supply-chain traceability is where the survey shows the largest execution gap. While substantially all respondents reported that they have begun mapping, 70% said their supply chains are only partially mapped, and 30% reported their supply chains are fully mapped, an early indicator that many companies may still be building the data needed for MACR calculations and audit defense.
Verification practices are also fragmented, with 48% relying primarily on internal verification, 42% expecting routine third-party audits, and 10% relying solely on supplier certifications.
To document MACR compliance, most firms are adopting a layered approach. Nearly 70% reported using both IRS cost safe-harbor tables and supplier certifications, compared with 10% using only safe-harbor tables and 20% relying only on supplier certifications.
That posture is increasingly being pushed downstream through procurement, as more than 80% of project developers said they require suppliers/manufacturers to represent that their products are not produced by PFEs and/or that suppliers do not know upstream parties are PFEs, with 62% requiring both representations.
The survey points to solar modules, battery packs, and inverters as the most exposed segment categories with parts directly or indirectly sourced from PFEs. In contrast, wind components were viewed as comparatively lower risk and more diversified across the U.S., Europe, and Japan.
Even with high engagement, many firms are leaning heavily on outside support to interpret evolving rules and build defensible processes. Nearly three-quarters of respondents reported engaging external legal or consulting advisors, and respondents also expressed a desire for standardization in documentation and supply-chain accounting practices.
Until Treasury and DOE provide clearer guidance, particularly on effective control, anti-circumvention, and MACR safe harbors, developers and manufacturers expect to revisit diligence already underway as the compliance framework tightens around 2026 deal flow.
Representatives from 143 solar companies have <a href="https://www.mercomindia.com/us-solar-companies-demand-end-to-permitting-moratorium/" target="_blank" rel="noopener">written</a> to the U.S. Senate and House of Representatives, urging them to work with the Department of the Interior to address the July memorandum that resulted in a near-complete moratorium on solar project permitting.

FEOC Compliance Emerges as Key Risk for US Clean Energy Credits: Report

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