Newly Installed Solar Double That of a Year Ago

(3BL Media/Justmeans) — Most people are aware that solar power has been booming. Prices are dropping rapidly and panels are going up in many places, either on residential rooftops or as part of large utility scale arrays. But few people have an appreciation for just how much solar has grown in a very short time. The new US Solar Market Insight Q4 2016 report from GreenTechMedia (GTM) Research really puts this into perspective.

The number are particularly impressive right now because the industry just had a phenomenal quarter.

In the third quarter of 2016, with the installation of 4,143 MW  of new capacity, total installed solar PV in the US increased by 99%. That’s right, you don’t need new glasses. Solar essentially doubled in the last quarter. It’s also a 191% increase over last year’s third quarter.

If you do the math, that’s a new MW coming online every 32 minutes. Someone was pretty busy. California alone added over 1 GW in a single quarter, the first state to ever do so. GTM forecasts a yearly total of 14.1 GW. That’s an 88% increase over the previous year.

Let’s take a look at some of the trends behind these numbers. For starters, utilities installed about 75% of this, a little over 3 GW. That shows a big surge of utilities embracing solar, Apparently, many have adopted an “if you can’t beat ‘em join ‘em,” attitude. As a result, the 60% solar share of all new generating capacity broke the quarterly record for market share.

Anyone who has been watching with dismay as our climate is becoming unrecognizable can take some solace in the fact that temperature records are not the only ones being broken. (Yes, if you’re 18 or older, the 10 hottest years on record have all occurred in your lifetime.)

However, there are a few obstacles in the road ahead that could slow the pace of solar growth, therefore setting back its efforts to slow the pace of warming.

For starters, over-enthusiasm on the part of investor-owned utilities may have led to a situation where they have already purchased enough renewable energy to meet the Renewable Portfolio Standard (RPS) obligations. There may be a bit of buyer’s remorse here, as they bought when prices were low only to find them going steadily lower in the months and years that followed. Still, if they’ve purchased all they need, they won’t likely be buying more.

Community solar projects where arrays are situated offsite from utilities and made available to consumers on a share basis so that they need not put panels on their own roofs grew fourfold in the past year. The largest share of these are serving corporate customers who have committed to running their businesses with renewable power. This surge in offsite production is expected to be temporary, as more customers are likely to want solar plus storage in the future which will most commonly be found onsite.

Next, despite the enthusiasm, solar growth rates are slowing down considerable since early 2015. Triple digit rates are falling to low double digits or even some slight contraction. One reason for this is “customer fatigue,” a response to too many sales pitches. People are shifting their financing options from leasing or power purchase agreements (PPA) to buy with cash or loans, and businesses need time to adjust. A third reason is that publicly traded companies may have shifted their emphasis from growing market share to becoming profitable.

GTM does not see these as any kind of long term setback, only a stage an industry goes through on the road to maturation. Solar prices are expected to continue falling and should soon achieve grid parity in nearly all states. It does remain to be seen, what the policy outlook will be and how companies will respond with sales and market strategies.

As stated earlier, utility PV represented the largest portion of last quarter’s growth. Residential PV was actually down 10% from the previous quarter, though up by 2% versus a year ago. Non-residential or commercial PV was up 15% for the quarter and up 37% from a year ago.

States with the most installations were California, Utah, Texas, Georgia and Colorado. North Carolina, which was sixth, is still number two nationwide, behind only California.

As for pricing, wafers dropped by 25% from the previous year, down to $0.15/Watt, while modules dropped 27% to $0.49/Watt.

With prices still falling sharply and the solar Investment Tax Credit renewed by Congress until the end of 2020, the outlook for the market is good. GTM is forecasting installation of over 20,000MW in year 2021. Of course, we don’t know what the impact of a Trump presidency, complete with oil-friendly cabinet will be, but most sources don’t think that too much will change, at least not right away.

We’ll certainly be watching and will be sure to do our best to keep you informed.

Image credit: EzumeImages: iStock