Solar Installations Fell Sharply in Q3David Wagman | December 14, 2017
The U.S. installed more than two gigawatts (GW) of solar photovoltaics (PV) in the third quarter of 2017, despite higher prices across all market segments and policy uncertainty.
In the most recent U.S. Solar Market Insight report, GTM Research and the Solar Energy Industries Association (SEIA) say that prices rose due to a tight global supply of modules and uncertainty around the Section 201 trade case now being weighed at the White House.
In the Section 201 safeguard case, the U.S. International Trade Commission (U.S. ITC) failed to achieve a formal recommendation of trade relief on foreign-manufactured crystalline silicon cells and modules. Rather, individual commissioners suggested to the Trump administration three sets of remedies at levels below the petitioners' requests. President Trump has until January 26 to decide the outcome of the case.
In all, 2,031 megawatts (MW) of PV were installed in the U.S. in the third quarter, the eighth consecutive quarter that the solar industry added more than 2 GW.
The capacity additions represent a 51 percent drop year over year. The cumulative year-to-date comparison puts the industry down 22 percent compared to this point in 2016. The report says this is in line with an expected 21 percent decline for all of 2016 versus all of 2017.
The residential PV sector fell 10 percent quarter-over-quarter. Declining growth is driven by weakness in California and major Northeast markets, which continue to feel the impact of pull-back from national providers.
In contrast to residential PV, the non-residential sector grew 22 percent year-over-year, primarily driven by regulatory demand pull-in from looming policy deadlines in California and the Northeast, in addition to the continued build-out of a robust community solar pipeline in Minnesota.
Through the first three quarters of 2017, 25 percent of all new electric generating capacity brought on-line in the U.S. has come from solar, ranking second over that period only to natural gas.
GTM Research forecasts that 11.8 GW of new PV installations will come on-line in 2017. That is down 22 percent from a record-breaking 2016. The forecast has been adjusted down from 12.4 GW last quarter to reflect continued challenges in the residential market and a delay in utility-scale completion timelines due to uncertainties surrounding the trade case.
The non-residential segment grew 22 percent year-over-year, installing 481 MW in Q3. Non-residential consists of commercial and industrial businesses that install solar, nonprofits and community solar programs.
The utility-scale segment was led by Nevada, North Carolina and Texas. The Lone Star State installed more solar in the third quarter than the state installed in all of 2015. Meanwhile, markets in the Southeast, including Florida, Mississippi and South Carolina, all are forecast to install more solar in 2017 than any year previously.
The report says 4 GW of utility-scale PV projects are currently under construction across the nation. GTM Research forecasts an additional 3.9 GW will come on-line by the end of the year. This would make 2017 the second-largest year for solar installations, second to 2016.
Despite more than half of U.S states now being at grid parity — meaning the levelized cost of energy is below electricity bill savings in the first year of system life — the U.S. residential segment posted its lowest solar installation total since the first quarter of 2015.
The report attributes the slowdown to persistent nationwide customer acquisition challenges and a move by solar installers that are pursuing profitable sales channels over growth. This has been particularly acute in mature markets that account for the majority of installation volumes, the report says.
Emerging markets, such as Florida and Pennsylvania, are expected to surpass 50 MW of residential capacity for the first time in 2017.
Looking forward to 2018 and beyond, both Section 201 remedies and corporate tax reform present considerable downside risk to the industry’s base-case forecasts, the report says.