U.S. solar market experiences record-breaking year
Over the next five years, the cumulative U.S. solar market is expected to nearly triple in size, even as a slight dip is expected in 2017.
The U.S. solar market experienced its biggest year ever in 2016, nearly doubling its previous record and adding more electric generating capacity than any other source of energy for the first time ever, according to GTM Research, Boston, Mass., and the Solar Energy Industries Association (SEIA), Washington, D.C.
Over the next five years, the cumulative U.S. solar market is expected to nearly triple in size, even as a slight dip is expected in 2017, as outlined in the “U.S. Solar Market Insight 2016 Year-in-Review” report.
On average, U.S. solar photovoltaic (PV) system pricing fell by nearly 20% in 2016, making it the greatest average year-over-year price decline since GTM Research began modelling pricing in this report series.
“It would be hard to overstate how impressive 2016 was for the solar industry,” says Abigail Ross Hopper, SEIA’s president and CEO. “Prices dropped to all-time lows, installations expanded in states across the country and job numbers soared. The bottom line is that more people are benefitting from solar now than at any point in the past, and while the market is changing, the broader trend over the next five years is going in one direction – and that’s up.”
The report forecasts that an impressive 13.2 gigawatts (GW) of solar PV will be installed in the United States in 2017, a 10% drop from 2016, though still 75% more than was installed in 2015. The dip will occur solely in the utility-scale market, following the unprecedented number of utility-scale projects that came online in the latter half of 2016, most originally scheduled for completion before the original expiration of the federal Investment Tax Credit, which has since been extended. By 2019, the utility-scale segment is expected to rebound, with year-over-year growth across the board.
“Though utility PV will re-set from an origination perspective starting in 2017-2018, 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," says Corey Honeyman, associate director of GTM Research. "That said, ongoing NEM and rate design battles in conjunction with a declining incentive environment for non-residential PV will continue to present risks to distributed solar growth."
Twenty-two states each installed more than 100 megawatts (MW) in 2016, up from just two states in 2010. There was high growth in states that are not known for their solar market, including Georgia, Minnesota, South Carolina and Utah.
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.