Which Solar Stock Has Dominated in 2026: SolarEdge, Enphase Energy, or First Solar?

David Moadel

Mon, September 7, 2026 at 5:30 PM GMT+3 6 min read

Quick Read

SolarEdge (SEDG) surged 19% while First Solar (FSLR), the sector's most profitable name, dropped 22% on policy uncertainty and securities litigation.
First Solar's 11.7% weighting in TAN actively muted gains from inverter names, leaving the ETF down 2% while SPY rose 13%.
Section 25D expiration crushed U.S. residential demand, sending Enphase's domestic sell-through down 34% and industry permits 30% below prior-year levels in June.
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Solar's 2026 scoreboard through Friday's close doesn't read like a sector at all. Three of the best-known U.S.-listed solar names moved in different directions this year, and the winner may surprise anyone who assumed size and profitability would carry the group.

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SolarEdge Technologies (NASDAQ:SEDG) stock closed at $34.20, up 19% year to date. Meanwhile, Enphase Energy (NASDAQ:ENPH) stock finished at $36.37, up 13%. First Solar (NASDAQ:FSLR) stock, the largest and most profitable name of the three, ended at $204.45, down 22%.

Between them sits a sector fund that never picked a side. The Invesco Solar ETF (NYSEARCA:TAN) was down 2% year to date. To provide the broader context, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) was up 13%, putting the broad market above every solar name except SolarEdge.

Policy Whiplash Drove the Year

Solar spent 2026 trading on federal tax-credit policy rather than on reported results. Expiration of the Section 25D residential clean energy credit pressured U.S. distributor buying and installer cash flows, and both SolarEdge and Enphase described soft domestic sell-through even as European demand grew sharply. That policy overhang set the tone for the group all year, overshadowing earnings results.

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The 25D reset hit residential demand harder than sector fundamentals suggested it would. Enphase's U.S. sell-through fell 34% from the prior year in Q2 2026, and industry-wide residential permits ran 30% below prior-year levels in June. Distributors have stayed cautious on inventory while tax-equity funding and FEOC definitions remain unresolved.

SolarEdge still returned to non-GAAP operating profitability in Q2 2026 with revenue of $346.25 million and a clear beat against consensus. Enphase's Q2 revenue landed at $291.85 million with non-GAAP gross margin of 46.8%, aided by an IEEPA tariff refund. Both names now carry heavy safe-harbor books tied to future third-party-owned project starts across 2028 and beyond.

Why SolarEdge Beat the Group

SolarEdge's rally reflects recovery from deeply depressed levels rather than a rerating on quality. The company captured more than 50% of U.S. commercial and industrial rooftop installations in the most recent industry report, and it's scaling its Nexus platform across Europe. Management has also pointed to the SolarEdge SST as an early foothold in AI data center power infrastructure.

Enphase's own IQ Solid-State Transformer targets the same AI power theme, with pilots planned for 2027 and commercial shipments in 2028. First Solar's problem was different. Its utility-scale model leans on Section 45X credits, and its 2026 guidance still assumes $2.10 billion to $2.19 billion of those credits.

First Solar's underlying business still looked strong on paper. The company's Q2 2026 adjusted EBITDA margin reached 61%, up from 51% a year earlier, and its contracted backlog stands at 45.1 gigawatts extending through 2030. Yet, FSLR stock spent the year absorbing a legal overhang from securities litigation tied to prior tariff disclosures alongside market questions about backlog conversion and future average selling prices.

Reading the 2026 Scorecard

The spread inside a single sector fund is the real story here. The TAN ETF's slight decline hides a wide gap between two recovering inverter names and a utility-scale leader that moved the other way. Its own holdings show First Solar as the largest of the three positions at 11.7% of net assets, followed by Enphase at 8.8% and SolarEdge at 6.3%, so FSLR stock weakness actively muted the fund's gain from SEDG and ENPH stock.

What to Watch Next

SolarEdge holds an investor day on September 10, 2026, and its safe-harbor detail plus updated Nexus rollout guidance could shape the fourth-quarter setup for SEDG stock. Investors can watch for Section 232 clarity on polysilicon, which First Solar cited as a gating item for its Southeast Asia capacity decisions. Any easing of U.S. residential funding uncertainty would also matter for both inverter names.

Enphase's Propel financing program is another swing factor to track. Management expanded it from four states to six during Q2 2026 and targeted 12 states in Q3 2026, aiming to replace part of the loan volume lost with 25D expiration. Momentum there could give ENPH stock a domestic demand story that doesn't require Washington's help.

The takeaway is that 2026 rewarded recovery from depressed levels rather than quality, and the largest, most profitable name in the group sits at the bottom. Investors sizing their exposure to any of these solar stocks should keep their positions moderate given the policy sensitivity. Another credit or tariff headline can flip the leaderboard again before year-end.

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