US solar market had record-breaking first quarter, report shows
A new report from Wood Mackenzie Power & Renewables and the Solar Energy Industries Association (SEIA) shows that the United States installed 2.7 gigawatts (GW) of solar photovoltaic (PV) in the first three months of the year, making this year’s first quarter the largest first quarter ever for the U.S. solar industry.
In May, Wood Mackenzie Power & Renewables and SEIA announced that the United States surpassed 2 million solar installations during the first quarter of the year. The solar industry is expected to reach 3 million installations in 2021 and 4 million in 2023.
The largest share of installations for the quarter came from the utility PV segment, with 1.6 GW, which makes up 61 percent of PV capacity installed.
The new U.S. Solar Market Insight report noted that 4.7 GW of projects are currently under construction, putting 2019 on track for 46 percent growth over 2018.
“Voluntary procurement of utility PV based on its economic competitiveness continues to be the primary driver of projects announced in 2019,” Wood Mackenzie Senior Solar Analyst Colin Smith said. “While many states, utilities, and cities have announced or proposed 50 or 100 percent renewable energy or zero-carbon standards, the announcements have not yet resulted in an uptick in RPS-driven procurement.”
The residential market also experienced annual growth, with 603 megawatts (MW) of residential solar installations in the first quarter, up 6 percent annually.
“Despite steady installations in Q1 2019, the residential market is still highly reliant on legacy state markets, such as California and the Northeast, which have seen only modest to flat growth over the past several quarters,” Wood Mackenzie Solar Analyst Austin Perea said. “As these major state markets continue to grow past early-adopter consumers, higher costs of customer acquisition will challenge the industry to innovate product offerings and diversify geographically.”
According to the report, 29 percent of residential capacity in the first quarter of 2019 came from markets outside the 10 solar states with the most capacity, the highest share ever for emerging markets.
The non-residential segment installed 438 MW during the quarter, which was down on a quarterly and annual basis. According to the report, this decrease is largely due to state-level policy reforms in historically strong markets for the segment such as California, Massachusetts, and Minnesota.
The authors noted that new community solar mandates in New York, Maryland, Illinois, and New Jersey are expected to help reinvigorate the segment starting in 2020.
Wood Mackenzie forecasts that, by the end of 2019, the U.S. solar market will grow 14 percent year-over-year. Over the next five years, total installed U.S. PV capacity is expected to more than double, with annual installations reaching 15.8 GW 2021 before the expiration of the residential federal Investment Tax Credit (ITC) and a decrease in the commercial tax credit to 10 percent for projects not yet under construction.
