Solar industry sees record installations in Q1
The U.S. solar industry had its largest quarter ever as 3.6 gigawatts (GW) of new solar photovoltaic (PV) capacity was installed in the first quarter of 2020.
Specifically, solar accounted for nearly 40 percent of all new electricity generating capacity added in the United States in the first quarter.
However, the COVID-19 has had a significant impact on the industry in the second quarter, according to a report released by the Solar Energy Industries Association (SEIA) and Wood Mackenzie. Construction has been delayed, and customer demand has dropped. Also, access to financing for projects of all sizes has been challenged.
“The solar industry has certainly been impacted by the pandemic, resulting in uncertainty for businesses and 72,000 Americans out of a job,” SEIA President and CEO Abigail Ross Hopper said. “Our industry remains one of the fastest-growing industries in the country, and with simple policy action now, we are ready to lead our economic recovery and provide new hope for out of work Americans in the second half of this year.”
Residential and non-residential markets will see decreases of 25 percent and 38 percent for 2020, according to forecasts. These segments face challenges posed by work stoppages, permitting delays, and drops in consumer demand. Further, distributed markets will see a combined 32 percent less solar installed in 2020 than previously forecasted.
However, Wood Mackenzie forecasts 33 percent overall growth in 2020 due entirely to strong performance of the utility-scale segment. Utility scale installations are expected to account for more than 14 GW of new installations this year.
“While the utility segment shows promise with sustained levels of procurement so far, lower energy demand due to productivity loss and wholesale electricity market price drops will add to the uncertainty,” Ravi Manghani, head of solar at Wood Mackenzie, said. “All in all, the pandemic and the ensuing economic slowdown will weigh heavily on the solar industry in the coming months if the economy is slow to recover and financing dries up.”
Beyond 2020, all market segments face uncertainty due to the pandemic. Growth is contingent on economies reopening, recovery of consumer and business demand, financial market stability, and a resumption of growth in electricity demand.
