Installation volume contracted, a federal credit expired, and the cost of winning a customer went up by roughly 40 percent. The three forces behind it, and what they mean for channel strategy.
Residential solar entered 2026 with a set of problems that compounded rather than offset each other. Installation volume contracted. A significant federal incentive expired. And the cost of winning a customer rose by roughly 40 percent on a cost-per-watt basis.
Each of those is survivable alone. Together they changed the economics of the channel.
Forecasts for the year put installation volume down by something in the region of a fifth. Capacity did not shrink at the same rate, because sales organisations are slower to unwind than demand is to fall.
The predictable consequence is more competitors bidding for fewer buyers. That shows up first in paid channels, where the auction dynamics translate falling demand into rising cost almost immediately.
The residential clean energy credit expired at the end of 2025. Its removal did two things at once. It raised the effective price to the homeowner, which shrank the qualifying pool at any given willingness to pay. And it removed the single clearest talking point in the pitch — a specific, quantifiable reason to act now.
A sales conversation that loses its urgency mechanism gets longer. Longer conversations cost more per closed deal even when nothing else changes.
More than a hundred solar companies have entered bankruptcy since 2023, including installers large enough that their failure was national news. For anyone buying or selling in this category, that has a practical effect beyond the headlines: it makes homeowners more cautious, lengthens diligence, and raises the bar on who a consumer will let into their home.
It also means anyone building a channel around solar should treat concentration as a live risk rather than a theoretical one.
When paid acquisition gets more expensive, the reflex is to optimise it — better creative, tighter targeting, more aggressive bidding. That is worth doing and it does not change the underlying dynamic, which is that everyone is buying from the same auction against the same competitors.
The alternative is to buy access to audiences that are not in that auction at all. A customer reached through a business they already trust has not been bid on by four competitors that morning, and arrives with something a cold click does not have: an implicit endorsement.
Two structural points make this fit solar awkwardly, and they are worth stating plainly rather than glossing. Solar has a hard homeownership gate, so a distribution partner's audience has to skew owner-occupier to be useful. And it is geographically constrained in a way telecom and security are not. Distribution helps, but it has to be routed rather than blanket-run — which is a different and more deliberate exercise than buying media.
We place exclusive home security, telecom and residential solar offers with ecommerce stores, publishers, newsletters and service businesses. Telecom and security run nationwide; solar covers 22 states.
Why Solar Acquisition Costs Rose Through 2026
Volume down, credit expired, cost per watt of acquisition up around 40 percent. What drove residential solar CAC higher and what it means for distribution.
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