Energize Weekly, March 24, 2021
Solar installations in the U.S., even in the face of the pandemic economy, set a record in 2020 with 19.2 gigawatts (GW) of capacity – a 43 percent increase over 2019, according to an industry market report.
“The year 2020 was a record-setting year for the industry and it won’t be the last,” said the report from consultant Wood Mackenzie and an industry trade group, the Solar Energy Industries Association (SEIA).
In the next decade, the market analysis projects a quadrupling of capacity to 400 GW from the current 100 GW.
Still, there are some challenges to market growth, including a tightening of financing, problems securing engineering and construction firms, and supply chain issues.
“Finally, there is a growing concern about solar product imports made with polysilicon from the Xinjiang province, China, due to reports of forced labor in the region and an inability to conduct independent audits, the report said.
Despite the hurdles, solar made up 43 percent of all new electricity-generating capacity in 2020, the largest share of any type of new generation. It was the second year in a row solar was the top ranked type of new generation.
Four states – California, Texas, Florida, and Virginia – accounted for 11.6 GW, or 60 percent of the total projects.
Utility-scale projects made up the largest share of new installations – 73 percent – and the 14 GW installed was a record for a single year. That record looks to be broken in 2021 as there are already 11.2 GW under construction setting a pace to hit 17.5 GW, the report said.
Residential solar took a dive in the first half of 2020, as the novel coronavirus pandemic hit, but rebounded and closed the year with an 11 percent increase over 2019, with 3.1 GW installed. Even though the growth was lower than 2019’s 18 percent rate, 2020 still set a record for residential installations.
The fourth quarter – 1 GW of installations in 2020 – is always a busy one for residential solar companies as installers rush to complete projects prior to year-end incentive expirations.
“Several major state markets set records for quarterly volumes, including Arizona, California, and Texas,” the report said.
Residential solar is also off to a strong start in 2021. A combination of spillover from 2020 and continued high sales, even though the first quarter usually sees a slowdown in consumer interest, are powering the market.
“Another reason for high expected volumes in the first half of 2021 is a surge in demand caused by the Texas winter storms in mid-February,” the report said. EnergySage – an online solar sales platform – reported Texas traffic to its website up more than 200 percent during the week of the storm.
The one sector that struggled through 2020 was non-residential solar, including solar gardens and commercial, and office installations. Non-residential solar projects were down 4 percent compared with 2019 to 2,074 megawatts (MW).
“Developers report that delays related to permitting and interconnection or approval processes at the municipal or county level reached anywhere from 4 to 90 days at their worst point,” the report said.
After a 20 percent rebound in 202l, non-residential solar is projected to contract in 2024 and 2025 as the federal credits for solar projects is stepped down.
“Longer-term, non-residential solar won’t grow meaningfully until costs decline,” the market report said.
California accounted for the most installation among the states with 3,904 MW of new capacity, a 26 percent increase from 2019. Texas and Florida each doubled the pace of installation in 2020 compared to 2019, with Texas having 3,455 MW of new capacity and Florida 2,822 MW.
Virginia moved up to fourth spot among states from 19 in 2019 as installations increased tenfold to 1,406 megawatts for the year.