Residential solar market growth driven by ‘diverse mix of national, regional installers’ in 2018

2018 US Solar Market report chart 1

The U.S. Solar Market Insight 2018 Year-in-Review Report from Wood Mackenzie Power & Renewables and the Solar Energy Industries Association (SEIA) mostly showed the initial uncertainty / impact of the tariffs on utility-scale and non-residential solar and how the future is super bright going forward in general (doubling capacity in the next five years). But the big positive in 2018 came in the stabilization / maturation of the residential market.

While annual growth fell in both the non-residential and utility-scale solar sectors, residential solar growth stabilized in 2018 after the previous year’s contraction. After a year in which residential solar experienced 15 percent contraction, 2018 marked a year of rebound as the market grew by 7 percent. Q4 was the largest quarter for the residential solar segment in two years, a sign that the residential market is stabilizing. In total, 314,600 new residential PV systems were installed in 2018.

The U.S. residential solar market has now seen five consecutive quarters of modest growth, and the fourth quarter of 2018 was the largest quarter for residential solar in two years.

“After the residential solar freefall of 2017, growth in 2018 was driven by a more diverse mixture of national and regional installers than in previous years,” said Austin Perea, senior solar analyst at Wood Mackenzie Power & Renewables. “With a pivot toward more efficient sales channels, both national and regional installers exceeded expectations in California and Nevada, which drove the lion’s share of residential growth in 2018.”

Of the top 10 markets in 2017, six markets experienced annual contraction in 2018 while two experienced double-digit percentage growth. Meanwhile, a handful of states are leapfrogging developed markets. Texas and Florida, two states with generally low solar penetration, stood out in 2018, adding more capacity than some of the highest penetration states, like Maryland and Massachusetts, signaling new state-level leadership on residential solar development.

“In 2018, we saw a pivot away from legacy, incentive-driven markets and the emergence of low-penetration markets with limited third-party ownership options, good PV resources, and low electricity rates – a trend we expect to continue,” the report states.

The other standout note is the diminishing power of net metering rules to influence the market. Up till now, any changes to NEM or rate structures would have created “demand pull-in,” but despite anticipated changes to incentives and NEM in 2019-2020, the major Northeast markets collectively saw no growth in installation volumes.

“This suggests that while changes to NEM policy and other incentives have greatly impacted growth in years past, 2018 marks a year of market maturation. While strong NEM policy remains an essential foundation for rooftop solar adoption, future growth across legacy markets will require technology and business-model innovation to tap into new customer demographics.”

roof top reportDownload the new Residential Rooftop Report to heat up your solar sales

The Residential Rooftop Report for the first quarter of 2019 is now available for download. The theme is “Heating Up Sales,” and we’ve teamed up with report sponsor Aurora Solar to examine ways for residential solar installation companies to lower customer acquisition costs, close more leads and overall run a more streamlined, efficient local solar business. Just fill out the form below to access your free report.

— Solar Builder magazine

The U.S. solar industry survived the Trump tariffs. Here are five stats to prove it

2018 US solar market report chart 2

Here are the key numbers in the just released U.S. Solar Market Insight 2018 Year-in-Review Report from Wood Mackenzie Power & Renewables and the Solar Energy Industries Association (SEIA).

10.6 GW

This is the amount of solar PV capacity that came online in 2018 — the third year in a row of double-digit GWs installed. Cumulative operating solar photovoltaic capacity in the U.S. is now at 62.4 GW — about 75 times more than was installed at the end of 2008.

2 percent

This is the decrease of installed capacity from 2017, which is all attributable to the Trump tariffs. The forecast shows the market rebounding in the years ahead. Non-residential PV and utility-scale PV declined 8 and 7 percent, respectively.

14 percent

That’s how much the total installed PV capacity in the U.S. is expected to rise by in 2019, with annual installations reaching 15.8 GW in 2021.

13.2 GW

That’s how much utility-scale solar was signed for via power purchase agreements, pushing the contracted project pipeline to its highest point in the history of U.S. solar. The contracted pipeline peaked in Q3 2018 at 25.3 GW the highest in the history of U.S. solar.

15.8 GW

That’s the expected annual solar installation capacity in 2021, prior to the expiration of the residential federal Investment Tax Credit (ITC) and a drop in the commercial tax credit to 10 percent for projects not yet under construction. The total installed U.S. PV capacity will more than double over the next five years.

— Solar Builder magazine

SEIA urges New York PSC to approve VDER changes proposed in Department of Public Services white paper

New York carbon tax

Current state of VDER in New York.

A coalition of clean energy organizations led by the Solar Energy Industries Association (SEIA) filed supportive comments on the New York Department of Public Service’s (DPS) white paper regarding the future of large commercial solar and community solar projects. SEIA urged the New York Public Service Commission (PSC) to swiftly approve the paper’s recommendations and the coalition’s suggested improvements.

“The DPS’ recommendations are a critical step forward in more fairly valuing larger solar projects and spurring deployment,” said Sean Gallagher, vice president of state affairs at SEIA. “Many New York towns, businesses and consumers who have wanted to go solar over the past year have not been able to amidst policy uncertainty, which is why we are urging the PSC to quickly adopt these recommendations. Making these policy changes now is also vital to meeting Governor Cuomo’s goal of moving New York to 70 percent renewable electricity by 2030.”

The policy, the Value of Distributed Energy Resources (VDER), determines how distributed solar projects in New York are compensated, and the white paper will inform the PSC’s upcoming decision on potential reforms. The coalition has been seeking VDER reforms for more than a year, as the current policy has undervalued large solar projects, hampered installations and reduced the state’s job growth.

In its white paper, the DPS proposes several critical changes to the VDER policy, which the coalition supports.

  • Changing the ineffective Demand Reduction Value of the VDER tariff, which was based on 10 hours of the previous year, to a longer set of forward hours. This critical change allows solar developers to design their systems to maximize output.
  • Establishing a new “community credit” that will allow municipal, business and residential customers to participate in community solar projects, a major improvement over the status quo.

While it is critical that the PSC quickly adopts these recommendations, the coalition also urged the DPS and PSC to continue their work on other parts of the VDER policy during 2019, ensuring that residential solar projects are appropriately valued.

The coalition, named the Clean Energy Parties, includes SEIA, the Coalition for Community Solar Access, the Natural Resources Defense Council, the New York Solar Energy Industries Association, Pace Energy and Climate Center, and Vote Solar.

roof top reportDownload the new Residential Rooftop Report to heat up your solar sales

The Residential Rooftop Report for the first quarter of 2019 is now available for download. The theme is “Heating Up Sales,” and we’ve teamed up with report sponsor Aurora Solar to examine ways for residential solar installation companies to lower customer acquisition costs, close more leads and overall run a more streamlined, efficient local solar business. Just fill out the form below to access your free report.

— Solar Builder magazine

Illinois’ solar energy policy (and job growth) is an example for other Midwest states

solar illinois

Illinois outpaced 48 states in solar jobs growth in 2018, adding 1,308 jobs in a single year, according to The Solar Foundation’s latest National Solar Jobs Census. The 37 percent increase moves Illinois ahead of other Midwest states in solar employment and established the state’s solar workforce as the 13th-largest in the nation. More impressively, the gains in Illinois come during a year when nationwide solar jobs fell by 3.2 percent.

midwest solar jobs

Inside the numbers

Illinois’ solar employment grew to 4,879, the Census shows, moving Illinois ahead of Minnesota, Michigan, Indiana and Missouri as strong state policy and rapidly declining solar costs attracted new jobs and investment to the state. The Future Energy Jobs Act of 2016 was an important driver of new solar jobs and investment in Illinois. The Path to 100 Act, announced last week, will ensure that renewable energy job growth in Illinois will be sustained.

“Illinois is poised to be one of the fastest-growing solar markets in the nation and the Path to 100 Act will be a key to its success,” said Sean Gallagher, vice president of state affairs for the national Solar Energy Industries Association (SEIA). “As evidenced by these new jobs numbers, markets follow smart policy. The opportunity is ripe here in Illinois to build on the foundation established by the Future Energy Jobs Act and cement the state as a national clean energy leader.”

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The Path to 100 Act is sponsored by Illinois Rep. Will Davis (D-Hazel Crest) and supported by an alliance of industry and advocacy partners. The bill will ensure that Illinois sustains its existing renewable energy success and meets its current policy goal of 25 percent renewable energy by 2025. The Path to 100 Act also moves Illinois toward the goal of 100 percent clean and renewable energy by expanding the state’s Renewable Portfolio Standard to 40 percent renewable energy by 2030.

The Path to 100 Act will help create more than 25,000 additional clean energy jobs by driving the procurement of an estimated 6,000 MW of new utility-scale solar, 6,500 MW of new wind, and 7,500 MW of new residential, commercial and community solar in Illinois by 2030.

“The solar jobs growth we saw in 2018 is just the beginning, the industry is ready to create tens of thousands of new clean energy jobs in the coming years,” said Lesley McCain, executive director of the Illinois Solar Energy Association (ISEA). “Sustaining that success, however, requires state policy that fits this rapidly growing market. The Path to 100 Act will ensure we don’t miss a critical opportunity to reach our clean energy goals and continue attracting new businesses to Illinois.”

— Solar Builder magazine

Solar Power Northeast takeaways: Solar’s Catch 22 options for navigating politicians, utilities and the public

solar power northeast 2019

The Northeast is a mature solar market already, but how can it keep on growing from here? Solar Power Northeast in Boston last week offered some ideas, but to me, mostly highlighted the complex utility-politician-public dynamic that leads to a lot of Catch 22 solutions. See if you can follow my scattered notes (and logic) here.

  • SEPA listed a focus on changing regulatory process to keep up with the pace of innovation as one of its goals going forward. This would be our top goal too, if we could vote. Even though it inherently sounds impossible, it also sounds like a “duh” idea. You mean the ways in which we govern and build society should match the tools and industries of the moment, and not those from 100 years ago? I don’t know. Let’s deliberate this for the next 10 years first. 


  • From the stage in the opening session, Representative Thomas A. Golden Jr., Massachusetts House of Representatives, explained how to best approach a representative when advocating for solar energy. He noted just how many people a representative is hearing from, all day every day, from a wide swath of industries, which means every meeting must provide a quick 101 of the issues at hand. But my main takeaway: Even if an idea is no-brainer common sense, if the representative doesn’t think there will be a groundswell of votes from their constituents, then they won’t be that interested.

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  • But the thing is: the populace does seem interested! SEIA’s numbers show that even 74 percent of GOP voters want government to do more with solar. During the opening session, Lynda Tocci, Principal at Dewey Square, an advocacy group, echoed this. From her view, solar should be a pretty easy sell because there is a message in solar for everyone – libertarians, conservatives, liberals.


  • But back to what Golden was saying, it is easy for someone to have interest in solar as a concept, but still be misinformed about its actual value here in 2019. This is Golden’s point. He understands that the value proposition of solar has changed so much over the last few years because this is an area he focuses on, but he knows it is not common enough knowledge among everyday people.


  • So, how does it become common knowledge? Tocci suggested the opportunity here is for solar installers to bridge the gap and tie advocacy efforts into their sales and marketing. Maybe providing a kit or an easy way for customers to advocate on solar’s behalf after they install a system. Or maybe mailers that make the show how regulatory decisions are tied to their energy bills. “Making an investment in advocacy is business development,” she says.


  • I like Tocci’s idea, and I get Golden’s point. But here’s my question is: why should it still be on solar installers to be the main group pushing along this ground swell? Knowing all we know about solar technology and its value now, isn’t this like asking plumbers to advocate for the value of indoor plumbing? When do representatives have an obligation to make informed decisions in everyone’s best interest from their more informed vantage point? Or better yet, utilities. Proactive utilities play a huge role, if they choose to, in helping to drive renewable energy demand, which would not just lower customer bills but also CAC costs. More solar adoption is tied to lower solar costs.


  • SEPA is playing a role in this effort. Gregory Dudkin, President, Electric Utilities for PPL Electric Utilities, mentioned that after hearing about Hawaii’s problems after connecting PV in abundance without the plan in place to deal with it, PPL Electric became proactive. Pennsylvania isn’t known for its solar industry yet, but PPL Electric realized its responsibility anyway and is ready to not just deal with large amounts of PV, but to encourage it. Thanks to its new automated system, it is now responding to 75 percent of residents’ solar project approval in 24 hours (soon to be 85 percent.)


  • But there are certainly challenges here too. Dudkin also said Pennsylvania floated legislation for EV infrastructure, but received a lot of pushback from the public feeling it was “just subsidizing rich people getting Teslas.” Which is a sentiment you can certainly understand.


So, there you have it. We all just need to figure out how to get public utilities, politicians and people all on the same page. Shouldn’t be that hard, right?

— Solar Builder magazine