As we’ve already reported, the U.S. solar market had its biggest year ever in 2016, nearly doubling its previous record and adding more electric generating capacity than any other source of energy for the first time ever. That was just a peek at what GTM Research and the Solar Energy Industries Association (SEIA) believe the next five years will look like.
Officially dropping their U.S. Solar Market Insight 2016 Year-in-Review today, the groups believe, over the next five years, the cumulative U.S. solar market is expected to nearly triple in size, even as a slight dip is expected in 2017.
On average, U.S. solar photovoltaic (PV) system pricing fell by nearly 20 percent in 2016. This is the greatest average year-over-year price decline since GTM Research began modelling pricing in this report series.
“It would be hard to overstate how impressive 2016 was for the solar industry,” said Abigail Ross Hopper, SEIA’s president and CEO. “Prices dropped to all-time lows, installations expanded in states across the country and job numbers soared. The bottom line is that more people are benefitting from solar now than at any point in the past, and while the market is changing, the broader trend over the next five years is going in one direction – and that’s up.”
Utility-scale drives the way
The report forecasts that an impressive 13.2 gigawatts (GW) of solar PV will be installed in the U.S. in 2017, a 10 percent drop from 2016, though still 75 percent more than was installed in 2015. The dip will occur solely in the utility-scale market, following the unprecedented number of utility-scale projects that came online in the latter half of 2016, most originally scheduled for completion before the original expiration of the federal Investment Tax Credit, which has since been extended. By 2019, the utility-scale segment is expected to rebound, with year-over-year growth across the board.
“Though utility PV will reset from an origination perspective starting in 2017-2018, distributed solar is largely expected to continue to grow over the next few years due to rapid system cost declines and a growing number of states reaching grid parity,” said Corey Honeyman, Associate Director of GTM Research. “That said, ongoing NEM and rate design battles – in conjunction with a declining incentive environment for non-residential PV – will continue to present risks to distributed solar growth.”
The non-residential market is expected to grow 11 percent year-over-year and install a record 1,756 MW. The community solar market nearly quadrupled from 2015 to 2016 due to major installations in Minnesota and Massachusetts, and community solar is anticipated to represent 30 percent of the non-residential market in 2018.
By 2019, the U.S. solar market is expected to resume year-over-year growth across all market segments. And by 2022, 24 states will be home to more than 1 GW of operating solar PV, up from nine today.
Twenty-two states each installed more than 100 megawatts (MW) in 2016, up from just two states in 2010. There was high growth in states that are not known for their solar market, including Georgia, Minnesota, South Carolina and Utah.
GTM Research expects the residential segment to grow 9 percent in 2017. California, which has historically accounted for nearly half of the U.S. residential market, is expected to decline in 2017; however, 36 of the 40 tracked states will grow year-over-year.
- In a record-breaking year for solar, the U.S. market installed 14,762 MWdc of solar PV in 2016 – nearly doubling the capacity installed in 2015. Growth was primarily driven by the utility PV segment, which installed more in 2016 than the entire market in 2015.
- For the first time ever, solar ranked as the No. 1 source of new electric generating capacity additions brought on-line on an annual basis at 39%.
- On average, a new megawatt of solar PV capacity came on-line every 36 minutes in 2016.
In 2016, a record 22 states each added more than 100 MW of solar PV.
- Q4 2016 was the second consecutive quarter that California added more than 1 GWdc of utility PV and the largest single quarter by one state.
- At 19%, residential PV saw its growth slow in 2016 from record growth in 2015 due to second half slowdowns in a handful of established state markets, offset somewhat by the emergence of several new state markets.
- The once-nascent community solar market quadrupled in 2016, playing a key role in supporting the largest year ever for the non-residential PV market.
- GTM Research forecasts that 13.2 GWdc of new PV installations will come on-line in 2017, down 10% from a record-breaking 2016. Utility PV is expected to account for 66% of that new capacity.
Total installed U.S. solar PV capacity is expected to nearly triple over the next 5 years. By 2022, more than 18 GW of solar PV capacity will be installed annually.
— Solar Builder magazine