This year, the U.S. home solar market is expected to shrink by 21% following the end of the federal tax credit and tighter financing conditions. That federal incentive provided a 30% tax credit on qualifying expenses for residential solar installations.
Florida, however, stands out as an unexpected bright spot. Within the first 13 weeks, Florida topped the country with permit approvals for a minimum of 450 megawatts of residential solar systems - four times the volume during the same stretch in the prior two years, per data from BloombergNEF and Construction Monitor. BloombergNEF estimates that Florida will install 710 megawatts in total this year, a 62% jump from the 439 megawatts put in place in 2025.
Jacob Traverso, director of operations at Florida‑based contractor Solar Source, said: "We're doing better than I had braced for and expected as an industry in Florida with the tax credit going away."
Florida's resilience is bolstered by several factors. The state still permits net metering, giving homeowners credits for surplus solar output, which becomes increasingly valuable as electricity rates climb. Additionally, the streamlining of permits reduces soft costs - which account for about 30% of the typical $31,000 installation - making solar more affordable. These advantages have helped Florida buck the national trend.
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The main driver behind Florida's success is a comprehensive permitting statute that came into force last summer. Statewide, third-party inspectors are now officially permitted to check solar systems, a role that was mostly carried out by government authorities before. Additionally, remote inspections are now allowed, enabling reviewers to examine photos, videos, or drone footage instead of visiting sites.
Matt Kirby, advocacy director of the nonprofit Permit Power, called the law a big deal. "That was the huge innovation," he said, noting that the law applies to multiple construction trades, not just solar.
Through net metering, residents receive credits for any surplus solar power they generate.
In 2026, Florida enacted additional legislation to broaden its permitting changes. Beginning in 2027, a single statewide form will be used for residential building permits related to solar and other one-trade projects, replacing the current patchwork of local applications.
Bill Johnson, who serves as board president for the Florida Solar Energy Industry Association and owns Brilliant Harvest, said of the reform: "something that I personally have kind of railed against literally since I started contracting 17 years ago." He added, "I have to submit exactly the same paperwork to every building department that I work in or every jurisdiction that I work within, but each one is on its own form."
However, there are indications that new permit approvals in Florida have decelerated in the second quarter, while California has taken the lead, notes BloombergNEF analyst Cosmo van Steenis. California is the sole state expected to surpass Florida in residential solar installations by year's end, per BloombergNEF. Johnson, whose firm Brilliant Harvest "is still fairly busy" this year, said the solar sector typically sees a slump after a year-end push when customers hurry to finish installations before December 31, "but last year was obviously more extreme."
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