The solar sector is heading into earnings season with something it hasn't had much of lately: clarity. After months of policy uncertainty clouding the outlook, fundamentals are finally taking the spotlight, and Goldman Sachs analyst Brian Lee thinks that's good news for U.S. solar companies.

Lee is calling for a largely positive 2026 outlook for the utility-scale market, with his coverage universe expected to deliver average top-line growth of around 20% year over year. That's the kind of number that gets investors paying attention, especially as the noise around policy questions starts to fade and the market can focus on what really matters: steady growth, strong bookings momentum, and exposure to rising U.S. power demand.

According to Lee, execution quality and robust bookings are going to be the key differentiators as these companies report fourth-quarter 2025 results in the coming weeks. Translation: the companies that can actually deliver on their promises will stand out.

Enphase Gets a Major Upgrade on Stronger Demand

The biggest call in the report? Lee upgraded Enphase Energy (ENPH) from Neutral to Buy and raised the price target from $29 to $45. That's a meaningful vote of confidence.

The analyst expects a near-term revenue trough in the first quarter of fiscal 2026, but he's more interested in the longer-term growth drivers. Lee projects stronger-than-expected fourth-quarter fiscal 2025 volume demand thanks to market share gains and year-end activity from cash and loan customers rushing to take advantage of the 25D tax credit before it expires.

With lean channel inventories, Enphase is entering 2026 with momentum on its side. Lee raised his EPS estimates for 2025, 2026, and 2027 to $2.85, $1.89, and $2.76, up from $2.78, $1.75, and $2.52, respectively. Those revisions reflect higher revenue projections of $1.47 billion (versus $1.45 billion prior), $1.17 billion (versus $1.12 billion earlier), and $1.33 billion (versus $1.27 billion prior), aided by incremental safe harboring activity.

Battery Storage Plays to Watch

Beyond Enphase, Lee highlighted several buy-rated SMID-cap names worth watching: Array Technologies, Inc. (ARRY), Fluence Energy, Inc. (FLNC), and Shoals Technologies Group, Inc. (SHLS). FLNC and SHLS are particularly well-positioned to benefit from battery storage demand, which is becoming an increasingly important piece of the renewable energy puzzle.

For Fluence Energy, Lee estimates first-quarter revenue of $404 million (versus consensus of $452 million) and adjusted EBITDA of ($37 million), compared to consensus estimates of ($32 million). It's a slightly more conservative take than the Street, but Lee's bullish on the bigger picture.

For Shoals Technologies, the analyst projects fourth-quarter revenue of $146 million (versus consensus of $145 million) and adjusted EPS of 14 cents, compared to the consensus of 13 cents. That's right in line with expectations, which suggests steady execution.

The bottom line? As policy uncertainty recedes, the solar sector is shifting from a story about Washington to a story about fundamentals. And for investors, that's a much easier story to understand.