December 15, 2017 Read More →

Eighth Consecutive Quarter of More Than 1 Gigawatt of U.S. Solar Additions

Solar Energy Industries Association:

In Q3 2017, the U.S. solar market installed 2,031 megawatts direct current (MW). Of that total, 51% came from the utility PV segment, which added more than 1 GW for the eighth consecutive quarter.

For all of 2017, non-residential PV is the only segment expected to grow on annual basis. The segment’s growth comes from projects rushing to install before rate and incentive structures changes in select markets, along with the continued emergence of community solar, which is on track to grow by more than 50% year-over-year.

Meanwhile, residential PV is still expected to fall year-over-year for the first time ever. This downturn is happening even though more than half of all states in the U.S. have now surpassed grid parity. Rather, the downturn has more to do with two major competitive landscape constraints. First, segment-wide customer-acquisition challenges are constraining growth in major state markets. Between Q1 and Q3 2017, the top 10 states still drove more than 80% of the market, but fell 16% year-over-year. Second, national residential solar companies have slowed operations and pursued more profitable sales channels by pulling back on less-scalable channels such as door-to-door sales, which has come at the expense of growth.

Meanwhile, the year-over-year downturn for utility PV in 2017 has been softened by projects that pushed out their completion dates from 2016 as a result of the 30% federal Investment Tax Credit extension. These projects that have spilled over into 2017 represent more than 50% of this year’s utility PV forecast. While Q3 was a relatively soft quarter for utility-scale, Q4 is expected to yield 3.9 GW of new installations.

Under GTM Research’s base-case outlook, U.S. solar is expected to fall year-over-year again in 2018 before rebounding in 2019, in large part due to trends in utility PV procurement. During the first half of this year, most utility solicitations have focused on projects that can come on-line with a 30% federal ITC in 2019 or later by leveraging commence-construction rules. Utility PV’s recovery is also driven by procurement outside renewable portfolio standards, with more than 75% of the current pipeline coming from voluntary procurement, PURPA, off-site corporate procurement, and California-based community choice aggregators.

Within the distributed PV market, residential solar is expected to resume 10% to 15% annual growth between 2018 and 2022, as customer-acquisition challenges are incrementally addressed and the market’s growth becomes less reliant on a small handful of national installers.

Meanwhile, non-residential PV is expected to fall in 2018 due to the aforementioned revisions to state incentive programs, virtual net energy metering rules, and solar-friendly rate structures across major state markets. The segment is expected to resume year-over-year growth in 2019, in large part due to growth in community solar across emerging legislative driven markets, namely New York, Maryland and Illinois.

More: Solar Market Insight Report 2017 Q4

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