Overall, the future for solar energy in the U.S. remains extremely bright. Even though the first quarter (Q1) solar installation numbers of this year were down slightly from Q1 of last year, total solar installations have topped the 2 million mark. The 1 million mark was reached in 2016, a peak year for solar across the board before the current administration-imposed tariffs on Chinese-made solar panels the following year. However, both domestic and foreign based (South Korea, Japan, and China) companies are ramping up production and creating new capacity in the U.S. to meet demand, reducing the impact of the solar tariffs.
The Solar Energy Industry Association (SEIA), conducted a survey of over 200 companies and organizations and found that solar installations to will increase to 3 million in 2021 and to 4 million in 2023. That’s an annual average of 500,000 new solar installations, and it will mean that the market will have doubled in size in only five short years!
In Q1 of 2019, the U.S. solar market installed a total of 2.7 GW of solar PV, the largest Q1 for solar ever recorded. While this represented a 37% decline from Q4 2018, it was a 10% increase from Q1 of 2018. Also, in Q1 of 2019, Florida has knocked California off the #1 spot for total installations, while Texas checks in at #14.
Let’s take a closer look at the market by different segments.
Residential
Residential solar growth continues to rebound modestly from its 2017 low, with a third consecutive quarter of more than 600 MW of new installed capacity. However, a lot of that overall growth is slower but steady in what the SEIA calls “legacy markets” like California and the northeast. 29% of new residential capacity in Q1 of 2019 came from markets outside the top 10–the highest share for emerging markets in industry history. The SEIA expects the leading edge in residential solar to be in emerging markets with “strong resources”—notably, sunlight—like Florida and Texas. The haphazard patchwork of some local and state regulations regarding the solar process from construction permitting to net metering continues to hobble growth to varying degrees. The SEIA and partners in Congress are working to develop a uniform national regulatory framework which should streamline the permitting and installation process as well.
Non-Residential
Nonresidential solar growth, which includes both commercial and community solar, is currently weaker than it was two years ago. Total nonresidential installation in Q1 of this year was 438 MW, down 28% from Q4 of 2018 and down 18% from Q1 of 2018. Last year, the top five corporations for solar capacity installed were as follows:
1. Apple 393.3 MW
2. Amazon 329.8 MW
3. Target 242.4 MW
4. Walmart 208.9 MW
5. Switch 179.0 MW
In other words, these five companies alone were responsible for the installation of 1.4 gigawatts of capacity in one year! Much of the growth in commercial capacity has been in ground-mounted arrays located on corporate campuses, which are growing faster than commercial rooftop arrays. With larger corporations needing parking for its’ employees, we can certainly expect this trend to continue as many parking structures are being retrofitted with solar panels. The SEIA forecasts that by 2023, roughly 30% of total nonresidential PV will come from community solar, and about 20% will come from solar-plus-storage projects as larger-scale battery use continues to grow and as prices drop.
Utility
Utility solar is experiencing a very healthy growth pattern. Utilities across the country installed a total of 1,633 MW (1.6 GW) in Q1 of 2019, and the future of this growth looks to continue its’ upward trend. The U.S. utility solar forecast for 2019-2024 has grown by 5.1 GW since Q4 of 2018. The largest contributor is an increase to Florida’s five-year outlook from 6.0 GW to 9.0 GW, due to new solar procurement by various state utilities. Since the last quarter, the 2019 forecast has grown by 1.2 GW, due largely to late project announcements in Texas that raised the state’s forecast by 720 MW. All in all, the utility solar industry has an installed base of over 37,000 MW, with another almost 28,000 MW “in the pipeline” with contracts signed or under construction, and announced plans to add another 51,000 MW. By the time all these projects are completed circa 2023, that will bring the U.S. utility solar capacity to 116,000 MW or 116 GW.
Bottom Line:
Despite some obstacles, solar energy use continues to grow at a rapid pace in the United States. Without waiting for the federal government to change its policies, states and public utilities, joined by an increasing number of manufacturers and installers like Universal Solar System, step by step, kilowatt by kilowatt, we are building a new energy infrastructure for our great nation.