Solar PV Additions Likely to Decline After a Big 2016David Wagman | March 10, 2017
The U.S. solar energy market installed 14,762 MWdc of solar photovoltaics (PV) in 2016, nearly doubling the capacity installed in 2015. Growth was primarily driven by the utility PV segment, which installed more in 2016 than the entire market in 2015.
Over the next five years, the cumulative U.S. solar market is expected to nearly triple in size, even as a 10% decline is expected in 2017. GTM Research and the Solar Energy Industries Association (SEIA) announced these figures March 9 in the U.S. Solar Market Insight 2016 Year-in-Review report.
On average, U.S. solar PV system pricing fell by nearly 20% in 2016, the report says.
“It would be hard to overstate how impressive 2016 was for the solar industry,” says Abigail Ross Hopper, SEIA’s president and CEO, in a statement. On average, a new megawatt of solar PV capacity came on-line every 36 minutes in 2016.
The report forecasts that 13.2 gigawatts (GW) of solar PV will be installed in the U.S. in 2017, a 10% drop from 2016, though some 75% more than was installed in 2015. The decline will occur solely in the utility-scale market, the report says.
That follows the large number of utility-scale projects that came online in the latter half of 2016. Most of those were scheduled for completion before the original expiration of the federal Investment Tax Credit, which has since been extended. By 2019, the utility-scale segment is expected to rebound.
Distributed solar is expected to continue to grow over the next few years due to rapid system cost declines and a growing number of states reaching grid parity, says Corey Honeyman, associate director of GTM Research. "That said, ongoing NEM (net energy metering) and rate design battles - in conjunction with a declining incentive environment for non-residential PV - will continue to present risks to distributed solar growth."
Twenty-two states each installed more than 100 megawatts (MW) in 2016. High growth was reported in states that are not known for their solar market, including Georgia, Minnesota, South Carolina and Utah.
The report expects the residential segment to grow 9% in 2017. California, which has historically accounted for nearly half of the U.S. residential market, is expected to decline in 2017; however, 36 of the 40 tracked states will grow year-over-year.
The non-residential market is expected to grow 11% year-over-year and install 1,756 MW, a record. The community solar market nearly quadrupled from 2015 to 2016 due to installations in Minnesota and Massachusetts. Community solar is anticipated to represent 30% of the non-residential market in 2018.
By 2019, the U.S. solar market is expected to resume year-over-year growth across all market segments. And by 2022, 24 states are expected to be home to more than 1 GW of operating solar PV, up from nine today.