Zacks Industry Outlook Features Sunrun, Canadian Solar, and Tigo Energy

Press Release: Solar Industry Update

Chicago, IL – March 6, 2026 — Zacks Equity Research has released a new analysis focusing on three notable solar companies: Sunrun (RUN), Canadian Solar (CSIQ), and Tigo Energy (TYGO).

Sector: Solar Energy

Full Report: Read the complete analysis here

Current Landscape for U.S. Solar

Solar energy demand in the United States continues to rise as utilities, businesses, and homeowners increasingly turn to solar-plus-storage solutions to meet clean energy goals, enhance grid reliability, and address growing electricity needs. However, recent legislative changes, such as the One Big Beautiful Bill Act, have reduced certain tax incentives and introduced new regulations regarding foreign entities, creating additional hurdles for the industry.

Despite these obstacles, the underlying strength of the sector remains intact. Key companies to watch in this space include Sunrun, Canadian Solar, and Tigo Energy.

Industry Overview

The solar sector can be broadly divided into two main categories: those that manufacture high-efficiency solar modules, panels, and cells, and those that focus on installing solar grids and complete power systems. Additionally, some companies specialize in producing inverters, which are essential for converting solar energy into usable electricity. According to the U.S. Energy Information Administration (EIA), solar is projected to account for 8% of the nation’s electricity generation in 2026 and 9% in 2027, maintaining its position as the leading source of new capacity.

Key Trends Influencing the Solar Market

• Robust Demand and Favorable Financing:

  Adoption of solar, particularly systems paired with battery storage, is accelerating among utilities, businesses, and households. The Solar Energy Industries Association (SEIA) anticipates that solar will remain the top source of new electricity generation capacity through the next five years, even as market and policy conditions evolve. SEIA forecasts nearly 44 GWdc of new installations in 2026, with annual additions stabilizing at 38-39 GWdc through 2030. The EIA expects solar generation to grow by 17% in 2026 and 23% in 2027. Lower interest rates are also making it more affordable to finance these capital-intensive projects, supporting further expansion.

• Policy and Regulatory Challenges:

  Recent government actions, particularly the One Big Beautiful Bill Act, have reduced federal tax credits and imposed new restrictions on sourcing components from certain foreign entities. This has led to increased uncertainty and complexity in project planning and procurement. Despite these challenges, SEIA projects a total of 246 GWdc of solar installations by 2030, indicating that long-term demand remains strong.

• Impact of Tariffs and Rising Costs:

  Higher tariffs on imported goods have raised manufacturing costs for solar companies, which are already facing supply chain disruptions. While module prices have dropped due to expanded manufacturing capacity and technological advancements, other costs—such as balance-of-system, racking, labor, and overhead—have increased, putting pressure on project economics.

Industry Performance and Valuation

The Zacks Solar industry is part of the broader Oils-Energy sector and currently ranks #143 out of more than 243 industries, placing it in the lower 41%. This ranking reflects a cautious near-term outlook, with analysts revising earnings estimates downward by 12.4% since November 30, bringing the current fiscal year’s average to $1.70 per share.

Despite these headwinds, the solar sector has outperformed both its parent sector and the S&P 500 over the past year, with industry stocks gaining 40.4% compared to a 34.6% rise in Oils-Energy and a 19.4% increase in the S&P 500.

On a trailing 12-month EV/EBITDA basis, the industry trades at 5.94x, below the S&P 500’s 17.73x and slightly under the sector’s 6.48x. Over the last five years, valuations have ranged from a low of 4.40x to a high of 39.17x, with a median of 15.63x.

Three Solar Stocks to Monitor

• Canadian Solar (CSIQ):

  Headquartered in Ontario, Canadian Solar is a major producer of solar PV modules and energy storage solutions. In February 2026, its subsidiary Recurrent Energy sold a 200 MWh battery storage facility, supporting the company’s strategy of recycling capital into higher-return projects. Analyst estimates for Q4 2025 earnings per share suggest a 25.2% year-over-year increase, with full-year 2025 estimates up 37.1% over the past two months. The stock currently holds a Zacks Rank #3 (Hold).

• Tigo Energy (TYGO):

  Based in California, Tigo Energy specializes in intelligent solar and storage solutions. The upcoming launch of its enhanced Tigo GO Battery in North America is expected to boost sales and expand its presence in the residential storage market. Analyst projections for 2026 indicate a 28% increase in sales and a 116.7% rise in earnings per share compared to the previous year. The company is currently rated Zacks Rank #3.

• Sunrun (RUN):

  Operating out of San Francisco, Sunrun develops and manages residential solar systems. In Q4 2026, the company reported a storage attachment rate of 71%, up from 62% a year earlier, and has installed over 237,000 solar and storage systems. Sunrun also reduced its debt by $81 million during the quarter. Analyst consensus for 2026 projects a 1.2% increase in sales and a 400% improvement in earnings estimates over the past two months. Sunrun holds a Zacks Rank #3.

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