US residential solar turbulence persisted through 2024
Residential solar installed capacity contracted for the first time since 2017, with significant shifts occurring in the financing landscape
3 minute read
Zoë Gaston
Principal Analyst, US Distributed Solar

Zoë Gaston
Principal Analyst, US Distributed Solar
Zoë's areas of focus include residential solar policy and project finance
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With interest rate cuts failing to lower financing costs and market turbulence causing some providers to file for bankruptcy, the US residential solar market installed capacity declined by 31% year-over-year in 2024. As the segment faces challenges, there has also been a shift in residential solar ownership trends. For the first time since 2016, third-party owned projects comprised more than half of the market.
To download an extract from our report US residential solar finance update H1 2025, fill in the form above or read on for highlights of the financing and competitive landscape. The report highlights the key players, trends, and forecasts of the third-party ownership (leases and power purchase agreements) and customer ownership (cash and loan purchases) markets.
Customer ownership (loan and cash) volumes dropped by over half in 2024 and will contract again in 2025
While the customer ownership segment (including loans and cash) still comprised most of the residential market with 54% share in 2024, its share fell throughout the year as third-party owned (TPO) projects gained momentum. The loan segment's share of the residential solar market steadily declined throughout 2024, averaging 43% overall (its lowest annual share since 2017).
Wood Mackenzie expects this pattern will continue in 2025. Financing rates remain high, and consumer uncertainty with the new administration and potential Investment Tax Credit (ITC) changes makes homeowners more cautious about large purchases.
As loan volumes declined over the past two years, the market became more fragmented. Major lenders experienced volume declines, while smaller players like credit unions occupy a growing market share. Lenders are navigating the slowdown differently, focusing more on home improvement offerings, launching their own TPO product, or re-thinking traditional loans to better compete with TPO.
Looking ahead, Wood Mackenzie expects a modest recovery for the loan segment in 2026 as lenders introduce more innovative financing options and TPO growth slows. The customer ownership segment will regain the majority share of the residential solar market starting in 2027.
The third-party ownership model will continue its dominance in the near term, fueled by the ITC adders and new entrant momentum
After a strong 2023, TPO volumes grew by more than 30% in 2024 for the second consecutive year. The segment reached 45% market share last year, its highest since 2016. TPO growth continued throughout the year, with the segment making up more than half of the residential solar market in Q4 2024 and setting an installation record.
With high interest rates and economic uncertainty, TPO can be a more attractive alternative to loans. TPO products have also gained momentum due to the availability of the ITC bonus adders (customer-owned projects are not eligible). As loan demand has declined, more companies have entered the TPO space to take advantage of additional tax credit opportunities, especially domestic content.
However, the TPO segment is not immune to headwinds. While Sunrun and Sunnova have dominated the TPO market in recent years, their combined market share fell considerably in 2024. After SunPower’s bankruptcy in 2024 and concerns about Sunnova’s ability to continue operating, installers are focused on financier diversification and risk mitigation. As a result, newer entrants like EverBright and Palmetto LightReach gained market share last year.
The TPO segment will continue growing in the near term and will make up most of the residential solar market through 2026. Its market share will fall in the second half of our outlook as the customer ownership segment recovers.
The Trump administration introduces significant uncertainty to the residential solar market
While no changes to the ITC or bonus adders have occurred, the current uncertainty is plaguing the industry, ranging from homeowner hesitancy to less tax equity funding. Elimination of the ITC would affect the entire residential solar industry, with some companies expecting that they could not stay in business. However, the residential solar market would adjust and eventually recover in some capacity.
For deeper insight and more detailed outlooks in the US residential solar market, download a free extract from our report by completing the form above.