U.S. solar panel shipments up 33% in 2020

According to the U.S. Energy Information Administration (EIA), shipments of solar photovoltaic modules, also known as solar panels, reached a record high of 21.8 million peak kilowatts in 2020, a 33 percent increase over 2019.

Solar panel shipments include imports, exports and modules produced and sold domestically, the EIA said. The agency attributed the increased demand for residential solar installations to people spending more time at home because of the COVID-19 pandemic, which resulted in an increased interest in home improvement.

Other reasons for the increase, the agency said, included expiring solar tax credits, continued growth in utility-scale solar capacity and falling costs for solar systems.

The federal solar Investment Tax Credit was set to decrease from 26 percent to 22 percent at the end of 2020, the agency said, resulting in a rush to get installations done before the tax expired. However, in December 2020, Congress passed an extension of the tax credit that would provide a 26 percent tax credit for solar systems installed between 2020 and 2022, and a 22 percent tax credit for systems installed in 2023.

Solar capacity additions in the U.S. increased 25 percent between 2019 and 2020 with utility-scale solar capacity (facilities with one megawatt of capacity or more) up 29 percent, and small-scale solar (mostly residential solar installations) up 19 percent.

The agency said the cost of solar panels has decreased significantly with the average value of solar shipments dropping from $1.96 per peak watt in 2010 to $0.38 per peak watt in 2020. Cost decreases were attributed to lower supply chain costs and an oversupply of modules due to increased production.