COVID-19 likely impacting solar industry supply chains, SEIA warnsDavid Wagman | March 17, 2020
Solar energy resources made up 40% of all new electric generating capacity in the U.S. in 2019, its highest share ever and more than any other source of electricity, with 13.3 gigawatts (GW) installed.
Despite policy challenges and a second year of the Section 201 tariffs, the U.S. solar market grew by 23% from 2018, according to the U.S. Solar Market Insight 2019 Year-in-Review report, released by the Solar Energy Industries Association (SEIA) and Wood Mackenzie.
Section 201 is a section of the Trade Act of 1974 that permits the president to raise import duties or impose nontariff barriers on goods entering the United States that injure or threaten to injure domestic industries.
Supply chain concerns
Abigail Ross Hopper, president and CEO of SEIA, tempered the 2019 results by saying in a statement, “We know anecdotally that the COVID-19 pandemic is affecting delivery schedules and our ability to meet project completion deadlines based partly on new labor shortages.”
SEIA and Wood Mackenzie said that given the nature of the outbreak, "it is too early to incorporate any changes into our outlooks with enough certainty."
The report said that total installed PV capacity in the U.S. was projected to rise by 47% in 2020, with nearly 20 GW of new installations expected by the end of the year. Each of the next two years were expected to be the largest on record for the U.S. solar industry.
Fallout from the pandemic has hit both supply chains and demand in the industry, and Ross Hopper told the Reuters news agency that SEIA's projection of 47% growth in 2020 will be reduced in the coming weeks and months. The trade group said it is tracking industry changes as they relate to solar equipment supply chains, component pricing and project development timelines.
Reuters said that solar companies face disruptions to supplies of components like panels and inverters, along with labor shortages as U.S. workers are asked to limit social contacts. In the rooftop solar market, homeowners may put large investments on hold, Ross Hopper was quoted as saying.
The SEIA's annual report for 2019 said that the residential solar sector reported record-setting installation totals with more than 2.8 GW installed, led by a record year in California and continued growth in emerging markets. Florida installed the second most rooftop solar in the country after California.
The utility-scale market added 8.4 GW of new capacity in 2019, more than half of which came online in the fourth quarter. The 4.4 GW of utility PV installed in the fourth quarter makes it the second-largest quarter in history for the market, the report said.
In addition, a total of 30.4 GW of new utility PV projects were announced in 2019. That lifted the contracted pipeline to 48.1 GW, a record.
In 2019, non-residential PV saw an annual decline of 7%, due largely to policy reforms and interconnection delays in key states like California and Massachusetts. A shrinking pipeline of community solar projects in Minnesota also contributed to deployment declines. Even so, the report said that community solar markets in New York, Maryland, Illinois and New Jersey are expected to grow.
Over the next five years, total installed U.S. PV capacity was expected to more than double, with annual installations projected to reach 20.4 GW in 2021 prior to the expiration of the federal solar Investment Tax Credit for residential systems and a drop to 10% for commercial and utility-scale customers.