US solar installations fall as federal tax credit expires
In 2016, the solar industry in the United States celebrated a record-breaking year as solar installations rose to an all time high.
This year, however, the looming expiration of a federal tax credit is dampening solar sales. But, according to a report by GTM Research and the Solar Energy Industries Association (SEIA) the industry is predicting a recovery to 2016 levels by the end of the decade.
Total installed US solar photovoltaics (PV) capacity is expected to nearly triple over the next five years, and by 2022, more than 18 gigawatts of solar PV capacity will be installed annually.
In the first quarter of 2017, the US solar market added 2,044 megawatts of new capacity. As the number of installations grew, prices fell to all-time lows and utility-scale system prices dropped below the $1 per watt barrier for the first time
The report says residential and non-residential PV markets are both expected to experience year-over-year growth, even though quarterly numbers fell compared to last year.
SEIA President and CEO, Abigail Ross Hopper, said “Solar is delivering more clean energy, adding jobs 17 times faster than the U.S. economy and creating tens of billions of dollars in investment.” She added “With its cost-competitiveness, we know solar will continue to play a growing role in America’s energy portfolio.”
The report shows utility-scale segment continues to drive the market as it represents over half of all PV installed during the first quarter of this year.
“Utility solar is on the cusp of another boom in procurement,” said Cory Honeyman, GTM Research’s associate director of U.S. solar.
According to the report, non-residential solar, which includes commercial, industrial and community solar installations, grew by 29 per cent year-over-year, but was down 39 per cent this quarter from a record high during the fourth quarter of 2016.
Minnesota’s growing community solar market which nearly doubled its cumulative community solar development in the first quarter was highlighted in the report.
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A number of states not traditionally known for solar markets saw large jumps in installations this quarter, including Idaho and Indiana. Emerging markets such as Utah, Texas and South Carolina also continued to expand.
Residential PV installations were down by 17 per cent during the first quarter. The report attributes that to national installers pulling back operations in unprofitable areas and over saturation in mature residential state markets like California.
In The Golden State, PV installations in California are expected to drop compared to last year. The expected reduction will be the first in a decade.
Despite the drop, California remains the state with the largest market for solar installations.
The report does raise concerns about the long-term outlook for US solar due to a trade dispute initiated by solar manufacturer Suniva.
Suniva petitioned for a minimum silicon PV module price of 78 cents per watt. Should the petition be successful, it could raise system costs between 13 and 35 per cent, depending on the segment.
Should the International Trade Commission rule in favour of Suniva, it would result in significant downside revisions to the GTM Research forecast across all three segments.
