The U.S. solar market had its biggest year ever in 2016 adding more electric generating capacity than any other source of energy for the first time ever. In a record-breaking year for solar, the U.S. market installed 14,762 MW of solar PV in 2016 — nearly doubling the capacity installed in 2015. GTM Research and the Solar Energy Industries Association (SEIA) announced these historic figures with the publication of the U.S. Solar Market Insight 2016 Year in Review report.
Growth was primarily driven by the utility-scale PV segment, which installed more solar in 2016 than the entire market in 2015. At 19%, residential PV saw its growth slow in 2016 from record growth in 2015 due to second-half slowdowns in a handful of established state markets, offset somewhat by the emergence of several new state markets. The once-nascent community solar market quadrupled in 2016 due to major installations in Minnesota and Massachusetts and playing a key role in supporting the largest year ever for the non-residential PV market.
For the first time ever, solar ranked as the No. 1 source of new electric generating capacity, accounting for 39% of new capacity additions in 2016. On average, 1 new MW of solar PV capacity came on-line every 36 minutes in 2016.
In 2016, a record 22 states each added more than 100 MW of solar PV, up from just two states in 2010, including states that are not known for their solar market as Georgia, Minnesota, South Carolina and Utah. The fourth quarter of 2016 was the second consecutive quarter that California added more than 1 GW of utility PV and the largest single quarter ever in one state.
On average, U.S. solar PV system pricing fell by nearly 20% in 2016. This is the largest average year-over-year price decline since GTM Research began modeling pricing in this report series.
The report forecasts that an impressive 13.2 GW of solar PV will be installed in the U.S. in 2017 — a 10% drop from 2016, but still up 75% over 2015. The dip will occur solely in the utility-scale market, following the unprecedented number of utility-scale projects that came on-line in the latter half of 2016, most originally scheduled for completion before the expected expiration of the federal Investment Tax Credit, which has since been extended. By 2019, the utility-scale segment is expected to rebound.
Distributed solar is largely expected to continue to grow over the next few years due to rapid system-cost declines and a growing number of states reaching grid parity. However, ongoing net metering and rate design battles — in conjunction with a declining incentive environment for non-residential PV — will continue to present risks to distributed solar growth
GTM Research expects the residential segment to grow 9% in 2017. California, which has historically accounted for nearly half of the U.S. residential market, is expected to decline in 2017; however, 36 of the 40 tracked states will grow year-over-year. The non-residential market is expected to grow 11% year-over-year and install a record 1,756 MW, and community solar is anticipated to represent 30% of the non-residential market in 2018.
By 2019, the U.S. solar market is expected to resume year-over-year growth across all market segments. And by 2022, 24 states will be home to more than 1 GW of operating solar PV, up from nine today.
Over the next five years, the cumulative U.S. solar market is expected to nearly triple in size, despite a slight dip expected in 2017. By 2022, more than 18 GW of solar PV capacity will be installed annually.
Source: GTM Research