While the solar market had a huge growth year in 2016―expecting an end to the tax credit that never came―2017 saw a 30% decrease in installation year over year, according to GTM Research and SEIA’s U.S. Solar Market Insight Report. The U.S. market installed 10.6 GWdc of solar PV, but solar still made up 30% of all new electric generating capacity brought online.
Residential solar fell 16% from 2016, as national installers shift away from rapid expansion in states like California and those in the Northeast. But those states have also seen regulatory demand pull-in from looming policy deadlines. This, in addition to community solar development in Minnesota and Massachusetts, contributed to the 28% growth of non-residential solar last year.
Utility development decreased in 2017, but this wasn’t unexpected. Many projects were rushed to complete in 2016 or postponed or canceled as the industry was uncertain about Section 201 tariffs. Interconnection delays and PURPA cancellation drove projects to spill into 2018. GTM and SEIA expect that voluntary procurement, rather than state-mandated RPS, to be the key driver of new utility PV demand.
Increased module costs due to a global shortage of Tier 1 modules and uncertainty around tariffs led to price increases in most segments in Q4 2017. However, falling racking and inverter prices and better operating efficiencies helped make up some of the increased cost.
In light of Section 201 and corporate tax reform, GTM Research has reduced its total U.S. solar PV forecasts by 13% from 2018 to 2022. Still, it expects another 10.6 GWdc of new PV installations in 2018 and total installed U.S. PV capacity to more than double over the next five years. By 2023, over 15 GW of PV capacity could be installed annually.
“The solar industry delivered impressively last year despite a trade case and market adjustments,” said SEIA president and CEO Abigail Ross Hopper. “Especially encouraging is the increasing geographic diversity in states deploying solar, from the Southeast to the Midwest, that led to a double digit increase in total capacity.”