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US Solar Additions to Peak in 2028, Piper Sandler Forecasts
Summary
An analysis from Piper Sandler projects U.S. solar capacity growth will peak in 2028, diverging from industry forecasts, as near-term tariff deadlines cause project delays.
Investment bank Piper Sandler projects that annual U.S. solar capacity additions will reach their peak in 2028, a forecast that diverges from the flatter long-term outlook provided by the Solar Energy Industries Association. In a note to clients, the firm also highlighted that near-term project timelines are being impacted by upcoming federal tariffs on solar components.
Tariff Headwinds and Market Outlook
According to Piper Sandler, the Section 232 tariffs, which were announced in August and are set to take effect on December 4, are causing developers to delay new module orders. Companies are reportedly working through existing inventories of "safe-harbored" equipment to avoid the new duties.
The firm characterizes these project schedule adjustments as "pushouts rather than cancellations," suggesting that underlying demand for solar projects remains firm. Despite these delays, new offtake signings were resilient in the second quarter at 4.9 GWdc, down just 8% year-over-year. Piper Sandler expects solar tracker companies to maintain healthy book-to-bill ratios above 1.0x heading into the third quarter.
AdCompany-Specific Analysis
Piper Sandler updated its ratings and price targets for several key companies in the solar sector based on its market analysis:
- Nextracker (NXT): The firm maintained an Overweight rating but lowered its price target to $110 from $116 due to mark-to-market adjustments. Piper expects Nextracker's Q2 fiscal 2027 revenue to reach $1,099 million, 3% above consensus estimates.
- First Solar (FSLR): An Overweight rating was also maintained for First Solar, though the price target was reduced to $251 from $260. The bank anticipates that Q3 2026 adjusted EBITDA could come in approximately 5% below consensus because of start-up costs associated with its South Carolina manufacturing facility.
- Array Technologies (ARRY): Piper Sandler reiterated its Neutral rating on the company. This follows a management decision to reset fiscal 2026 free cash flow conversion guidance downward, from the mid-40s percentage of EBITDA to the 20s percentage, due to accounts receivable being pushed into the next fiscal year.
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