According to GTM Research and SEIA’s latest U.S. Solar Market Insight Report, 2,031 MW of PV were installed in the U.S. in Q3 2017. That’s the nation’s lowest quarterly total since Q3 2015. Two of the three market segments tracked by GTM Research and SEIA were down on the quarter and on the year; however, the non-residential segment was the lone standout. The U.S. installed 481 MW of non-residential PV in the third quarter, representing growth of 22% year-over-year.
In Q3 2017, the U.S. market installed 2,031 MWdc of solar PV, of that total, 51% came from the utility PV segment, which added more than 1 GWdc for the eighth consecutive quarter. This figure represents a 51% decrease year-over-year from Q3 2016. Through the end of Q3, installations are tracking 22% behind the pace set through the same period during a record-breaking 2016.
The residential PV sector fell 10% 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% 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.
GTM Research forecasts that 11.8 GWdc of new PV installations will come on-line in 2017, down 22% from a record-breaking 2016. Its forecast has been adjusted downward from 12.4 GWdc last quarter to reflect continued challenges in the residential market and a push back in utility-scale completion timelines due to uncertainties surrounding the trade case.
For all of 2017, non-residential PV is the only segment expected to grow on annual basis. The segment’s growth comes from projects rushing to install before rate and incentive structures changes in select markets, along with the continued emergence of community solar, which is on track to grow by more than 50% year-over-year. Meanwhile, residential PV is still expected to fall year-over-year for the first time ever. This downturn is happening even though more than half of all states in the U.S. have now surpassed grid parity.
Meanwhile, the year-over-year downturn for utility PV in 2017 has been softened by projects that pushed out their completion dates from 2016 as a result of the 30% federal Investment Tax Credit extension. These projects that have spilled over into 2017 represent more than 50% of this year’s utility PV forecast. While Q3 was a relatively soft quarter for utility-scale, Q4 is expected to yield 3.9 GWdc of new installations.
Under GTM Research’s base-case outlook, U.S. solar is expected to fall year-over-year again in 2018 before rebounding in 2019, in large part due to trends in utility PV procurement.
Within the distributed PV market, residential solar is expected to resume 10% to 15% annual growth between 2018 and 2022, as customer-acquisition challenges are incrementally addressed and the market’s growth becomes less reliant on a small handful of national installers. Meanwhile, non-residential PV is expected to fall in 2018 due to the aforementioned revisions to state incentive programs, virtual net energy metering rules, and solar-friendly rate structures across major state markets. The segment is expected to resume year-over-year growth in 2019, in large part due to growth in community solar across emerging legislative driven markets, namely New York, Maryland and Illinois.
Total installed U.S. PV capacity is expected to more than double over the next five years and by 2022, nearly 15 GW of PV capacity will be installed annually.
Source: GTM Research