The U.S. solar market is set to grow a staggering 119 percent this year says GTM Research in its latest “U.S. Solar Market Insight Report 2015 Year in Review“, published in conjunction with the Solar Energy Industries Association (SEIA).
Led by the utility-scale segment, GTM Research forecasts 16 gigawatts (GW) of solar will be installed in the U.S. in 2016, more than doubling the record-breaking 7.3 GW installed in 2015.
While utility-scale installations will represent 74 percent of the installations for the year, the residential and commercial markets will also experience strong growth in 2016. In fact, the U.S. is on the verge of the 1 millionth solar installation milestone.
SEIA president and CEO Rhone Resch said:
“This is a new energy paradigm and the solar industry officially has a seat at the table with the largest energy producers. Because of the strong demand for solar energy nationwide, and smart public policies like the ITC and NEM, hundreds of thousands of well-paying solar jobs will be added in the next few years benefiting both America’s economy and the environment.”
With the federal Investment Tax Credit (ITC) initially set to expire at the end of this year, developers and EPCs filled their pipelines with projects that would come on-line in 2016. In December, however, an extension of the ITC provided long-term market certainty. Now, in 2016, state-level drivers and risks will move to the forefront and play even larger roles in the growth of both distributed and utility-scale solar.
According to the report, the rollout of new community solar programs, new utility-led efforts to enable corporate procurement of offsite solar and ongoing debate over the value of rooftop solar are three key trends that will drive U.S. solar demand throughout the year.
GTM Research Senior Analyst Cory Honeyman said:
“In 2016, the rooftop solar economic outlook will depend not only on favorable outcomes to net energy metering debates, but customer-wide and solar-specific rate structure reforms that can impact savings due to solar as well.”
On the non-residential side, PV demand will be supported by a triple-digit megawatt (MW) pipeline of community solar projects. Colorado, Massachusetts and Minnesota will collectively install more than 100 MW of community solar this year.
Looking ahead to 2017, the residential and non-residential PV markets are both expected to grow year-over-year, but the report cautions that U.S. solar is still expected to drop on annual basis due to the pull-in of utility PV demand in 2016.
Honeyman, noting that the market will shrink to a still-impressive 10 GW, said:
“As the double-digit gigawatt utility PV pipeline is built out in 2016, utility solar is expected to experience a reset in 2017. But between 2018 and 2020, the extension of the ITC will reboot market growth for utility PV and support continued growth in distributed solar as a growing number of states reach grid parity.”
The federal solar Investment Tax Credit (ITC) provides a 30 percent tax incentive on all solar projects. In December 2015, Congress extended the credit out to 2019 with a stepdown through 2022 and project completion deadline of 2023 for some projects.
By 2021, GTM Research expects the U.S. solar market to surpass 100 cumulative GW, with an annual install rate of 20 GW or more.
Report’s Key Features
- The U.S. installed 7,260 MWdc of solar PV in 2015, the largest annual total ever and 16% above 2014.
- Residential PV was once again the fastest-growing sector in U.S. solar, installing over 2 GWdc for the first time and growing 66% over 2014.
- Utility PV also had a record year with over 4 GWdc installed, up 6% over 2014, with nearly 20 GWdc still in development.
- Thirteen states installed over 100 MWdc of solar each in 2015, up from nine in 2014.
- 110 MW ac of concentrating solar power (CSP) capacity came on-line in late 2015, when SolarReserve’s Crescent Dunes project began sending electricity to the grid.
- For the first time ever, solar beat out natural gas capacity additions, with solar supplying 29.4% of all new electric generating capacity brought on-line in the U.S. in 2015.
- Cumulative solar PV installations surpassed 25 GWdc by the end of the year, up from just 2 GWdc at the end of 2010. Cumulative CSP capacity now stands at 1.8 GWac.
- GTM Research forecasts that 16 GWdc of new PV installations will come on-line in 2016, up 120% over 2015. Utility PV is expected to drive the majority of demand, accounting for nearly three-fourths of new installations.
For more information, visit SEIA website.
Press Release by the Solar Energy Industries Association (SEIA). Image Credit: SEIA & GTM Reseach.