U.S. solar system prices increased across utility and commercial segments in the second quarter of 2026, driven by persistent structural materials tariffs and rising domestic transportation expenses, according to the latest pricing analysis from Wood Mackenzie and the Solar Energy Industries Association (SEIA).

Residential solar stood as the single exception to the upward pricing trend, with turnkey residential system costs dropping 1.4% year-over-year to average $3.36 per watt in Q2. Commercial solar system pricing experienced the steepest inflation, rising 5.6% year-over-year to $1.77 per watt. In the utility-scale segment, fixed-tilt system prices rose 0.9% year-over-year to $0.95 per watt, while single-axis tracking systems increased 2.0% over the same period to reach $1.06 per watt.

The top-line pricing trends reflect a widening divergence between equipment hardware costs and site-level installation logistics. While module hardware prices declined across the board, those savings were largely absorbed by rising structural, electrical, and transport expenditures.

In the distributed generation market, module prices dropped by an average of 16% year-over-year to hit $0.37 per watt in Q2. The sharp reduction followed the invalidation of International Emergency Economic Powers Act tariffs earlier in 2026, which eased trade pressure on imported solar components.

Conversely, utility-scale module price declines were far more muted. Utility module costs fell just 2% year-over-year, averaging $0.33 per watt in Q2. The muted decline stems from a widespread operational shift toward domestic procurement, as developers pay a notable premium for U.S.-manufactured modules to secure federal domestic content adders and insulate project pipelines from trade enforcement risks.

Cost reductions on modules were countered by a 15% average increase in logistics and freight expenses across all market segments. Logistics inflation has been driven primarily by higher oil and gas prices, which have jumped roughly 50% year-over-year since the start of the Middle East conflict.

Additionally, Section 232 tariffs on raw aluminum, steel, and copper continue to elevate structural and electrical balance of plant costs, affecting both imported and domestic equipment. The import duties affect both foreign supply chains and domestic equipment manufacturers relying on imported raw metals, keeping racking, tracker, and wiring costs high for developers across all scales.

Wood Mackenzie calculates its national average solar system pricing using a bottom-up modeling framework. The methodology captures overnight contracting prices incurred during the year in which the project is being contracted without factoring in procurement or construction lags. This is accomplished by combining tracked wholesale pricing of major solar components and supply chain data models with direct industry interviews.