Unexpectedly speedy progress in solar markets like Florida and Texas is driving up expectations for U.S. solar installations, with Wood Mackenzie Power & Renewables now forecasting greater than 13 gigawatts of capability additions in 2019.
That units the U.S. solar market up for 25 p.c progress in comparison with final yr’s 10.6 gigawatts, in what can be its second greatest yr of all time, in keeping with the newest U.S. Solar Market Insight Report from Wood Mackenzie and the Solar Energy Industries Association (SEIA).
Since final quarter, introduced solar procurements and shifts available in the market have led WoodMac to extend its forecast for 2019 utility-scale installations by 1.2 gigawatts, and by 5.1 gigawatts for the 2019-24 interval.
Texas accounts for a lot of the elevated forecast for this yr, whereas Florida has pushed the five-year increase due to formidable solar progress plans at utilities together with NextEra Energy’s Florida Power & Light and Duke Energy Florida. Last month Florida Power & Light introduced the beginning of building on 10 new solar crops totaling greater than 700 megawatts, as the economics of solar within the Sunshine State look more and more favorable in opposition to gas-fired technology.
The U.S. solar market pulled again sharply after its peak yr in 2016, however it’s climbing quickly as soon as once more as prices fall and builders move to take advantage of the funding tax credit score’s (ITC) phasedown.
Over an extended time horizon, solar is predicted to profit from its rising competitiveness in opposition to wind energy in a rising variety of central U.S. states the place wind has lengthy been the dominant supply of latest renewables capability. The wind business’s manufacturing tax credit score is phasing down more rapidly than solar’s ITC, and in contrast to the PTC, which is on its solution to zero, the ITC is scheduled to cease phasing down indefinitely at 10 p.c for commercially owned tasks.
By the mid-2020s, WoodMac expects utility-scale solar to be cheaper than wind on a levelized price foundation in plenty of states inside grids operated by the Midcontinent Independent System Operator and the Southwest Power Pool — together with Illinois, Iowa, Kansas, Michigan and the Dakotas.
“Solar’s growth is increasing everywhere, including traditional solar states — but also pretty rapidly in less traditional solar states,” Colin Smith, senior solar analyst at WoodMac, stated in an interview.
Total put in solar capability is predicted to greater than double over the approaching five-year increase interval, cresting at 16.4 gigawatts in 2021 as the ITC phases down, WoodMac predicts. Solar builders are within the strategy of finalizing their methods for maximizing the ITC, as wind builders did a number of years in the past for the PTC.
Other highlights from the report embody:
- The U.S. put in 2.7 gigawatts of latest solar capability through the first three months of the yr, making it the market’s largest first quarter thus far.
- Solar accounted for 51 p.c of all new U.S. power producing capability through the first quarter, an unusually excessive share. Analysts say that elevated degree is not going to essentially maintain regular all through the rest of the yr.
- During the primary quarter, the U.S. put in its 2 millionth solar panel — simply three years after crossing the 1-million-panel milestone.
- PV system costs are at historic lows throughout the assorted market segments, regardless of the Trump administration’s tariffs on imported gear. Last week the U.S. granted one other spherical of tariff exemptions that includes bifacial modules, that are anticipated to play a bigger function available in the market within the years forward.
While utility-scale tasks stay the market’s major driver, accounting for 61 p.c of U.S. solar installations within the first quarter, the residential market continues its rebound. The residential market crumpled in 2017 after one-time nationwide chief SolarMetropolis (now Tesla) fell on laborious occasions and reined in its aggressive progress technique, however the market has since stabilized — putting in 603 megawatts throughout Q1, up 6 p.c yr on yr.
Weak progress in former powerhouse residential markets like California and the Northeast is being offset by energy in plenty of “emerging” state markets, together with Florida and Texas. Nearly one-third of latest residential capability through the first quarter got here from markets outdoors the highest 10 in cumulative capability, the best share ever.
WoodMac forecasts progress within the residential market of 5 to 20 p.c through the 2019-21 interval, pointing to new drivers like Maryland’s renewable portfolio normal enhance, the elimination of South Carolina’s internet metering cap, and Illinois’ Adjustable Block Program. And California’s home solar mandate will start fueling the market there starting in 2020.
In distinction to the rising utility and residential markets, non-residential installations proceed to battle, with 438 megawatts put in place through the first quarter, down 18 p.c from final yr. But WoodMac expects the non-residential market to see a modest rebound over the subsequent few years as neighborhood solar packages takes off in states like New York, Maryland and New Jersey.
For extra perception, the free govt abstract from WoodMac and SEIA is out there here.