By Frank Andorka, Senior Correspondent
Though the overall solar market declined in Q2 of 2018, there was good news to be had in the utility-scale and residential sectors. Those are the headlines from the Q2 U.S. Solar Market Insight Report from the Solar Energy Industries Association (SEIA) and Woods MacKenzie Power & Renewables (WKPR) (formerly GTM Research).
As some predicted, the decision by the Chinese to halt their domestic market sent component prices into a nosedive, which allowed the utility-scale solar market to procure nearly 8.5 GW of solar in the second quarter. Lower than expected tariffs – starting at 30% – also contributed to the surge.
But even the residential solar, which had struggled in recent quarters to the tune of a 15% contraction in 2017, is showing increasing stability, according to the most recent numbers.
“Once lower-than-expected module tariffs were announced in January 2018, developers and utilities began announcing new projects,” Wood Mackenzie Senior Analyst Colin Smith writes in the report. “As we move toward 2019, we expect to see continued procurement growth as developers look to secure projects they can bring online before the Investment Tax Credit (ITC) steps down to 10 percent in 2022.”
In the residential sector, 577 MW were installed in the second quarter of the year, which were flat compared to the previous quarter as well as year on year. According to WKPR, “declines in previous quarters were less a symptom of the tariffs but instead a result of customer acquisition challenges and the scaling back of several large installers. The report points to the leveling out of the market as a sign that customer acquisition challenges may be subsiding. Emerging residential state markets like Florida and Nevada posted large gains in installations and helped the segment rebound.”
In other words, as SEIA President and CEO Abigail Ross Hopper said, the tariffs have had some effect on the solar industry, but it is too strong to stay down for long. Indications are that the second half of 2018 will remain strong, and that 2019 could be a rebound year.
Other key findings from the report include:
- In Q2 2018, the U.S. market installed 2.3 GWdc of solar PV, a 9% year-over-year decrease and a 7% quarter-over-quarter decrease.
- In the first half of 2018, 29% of all new electricity generating capacity brought online in the U.S. came from solar PV.
- For a second consecutive quarter, the residential PV sector was essentially flat on both a year-over-year and quarter-over-quarter basis – an encouraging sign of market stabilization after a year in which the market contracted 15%.
- Non-residential PV fell 16% quarter-over-quarter and 8% year-over-year.
- Corporate procurement of utility PV through physical PPAs, virtual PPAs, and green tariffs has grown to account for 12% of projects in development.
- Wood Mackenzie Power & Renewables forecasts flat growth in 2018 vs. 2017, with another 10.9 GWdc of new PV installations expected.
- Total installed U.S. PV capacity is expected to more than double over the next five years. By 2023, more than 14 GWdc of PV capacity will be installed annually.