Solar PV sets a record in 2016 and is top choice for new generating capacity
Energize Weekly, March 15, 2017
The U.S. solar market—led by utility-scale projects—set a record in 2016, doubling its previous high and adding more generating capacity than wind or natural gas for the first time ever, according to a new report.
A total of 14,762 megawatts (MW) of solar photovoltaic (PV) came online in 2016 or 39 percent of all the new generating capacity for the year.
In the next five years, the market is projected to triple in size according to the report, U.S. Solar Market Insight 2016 Year in Review, compiled by GTM Research and the Solar Energy Industries Association (SEIA).
One reason for the dramatic growth was the continued decline in the price of solar PV systems. In 2016, the price fell almost 20 percent—the biggest drop since GTM Research began tracking pricing for this series of reports.
“It would be hard to overstate how impressive 2016 was for the solar industry,” Abigail Ross Hopper, SEIA’s CEO, said in a statement. “Prices dropped to all-time lows, installations expanded in states across the country, and job numbers soared.”
The market analysis projected a 10 percent dip in 2017 installations, coming solely in the utility-scale market after an unprecedented push to get projects online before the expiration of the federal Solar Investment Tax Credit, which has since been extended. The utility-scale market is set to rebound by 2019, according to the report. It forecasts 13.2 gigawatts of PV will be installed in the U.S. in 2017.
Distributed generation—rooftop solar and solar gardens—is expected to see continued growth over the next few years as prices come down and more states reach grid parity, according to Cory Honeyman, associate director of GTM Research. GTM is projecting a 9 percent growth in residential solar in 2017.
California, which has accounted for nearly half of the U.S. residential solar market, is expected to see a drop in 2017, but 36 of the 40 states tracked in the report are projected is see year-over-year growth. The non-residential distributed market, primarily commercial and industrial buildings, is expected to grow 11 percent year-over-year and install a record 1,756 megawatts.
Still, Honeyman noted that the growth in distributed solar faces risks from the ongoing net-metering and rate design battles in some states, which could affect the incentives now provided for distributed solar.
The geographic spread for solar has also increased, according to the report, with 22 states each installing more than 100 MW of projects in 2016, compared with just two in 2010. There was high growth in states not known for their solar, including Georgia, Minnesota, South Carolina and Utah.
By 2022, 24 states are projected to have more than 1 gigawatt of solar PV, up from nine today, and more than 18 gigawatts of solar PV capacity will be installed annually.
“The bottom line is that more people are benefiting 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,” SEIA’s Hopper said.