The USA’s solar market is set to grow a staggering 119 % this year says GTM Research in its latest U.S. Solar Market Insight Report 2015 Year in Review, published in conjunction with the Solar Energy Industries Association.
GTM Research forecasts 16 GW of solar will be installed in the USA in 2016, led by the utility-scale segment. This will more than double the record-breaking 7.3 GW installed in 2015.
While utility-scale installations will represent 74% of the installations for the year, the residential and commercial markets will also experience strong growth in 2016. In fact, the USA is on the verge of its one million solar installations milestone.
“This is a new energy paradigm and the solar industry officially has a seat at the table with the largest energy producers," said SEIA president and CEO Rhone Resch. "Because of the strong demand for solar energy nationwide, and smart public policies like the ITC and NEM, hundreds of thousands of well-paying solar jobs will be added in the next few years benefiting both America’s economy and the environment."
With the federal Investment Tax Credit (ITC) initially set to expire at the end of this year, developers and EPCs filled their pipelines with projects that would come on- line in 2016.
In December, however, an extension of the ITC provided long-term market certainty. Now, in 2016, state-level drivers and risks will move to the forefront and play even larger roles in the growth of both distributed and utility-scale solar.
According to the report, the rollout of new community solar programmes, new utility- led efforts to enable corporate procurement of offsite solar and ongoing debate over the value of rooftop solar are three key trends that will drive US solar demand throughout the year. GTM Research expects the US market to pass 100 cumulative GW by 2021, with an annual install rate of 20 GW or more.
On the non-residential side, PV demand will be supported by a triple-digit megawatt pipeline of community solar projects. Colorado, Massachusetts and Minnesota will collectively install more than 100 MW of community solar this year.
Looking ahead to 2017, the residential and non-residential PV markets are both expected to grow year-over-year, but the report cautions that US solar is still expected to drop on annual basis due to the pull-in of utility PV demand in 2016.
“As the double-digit gigawatt utility PV pipeline is built out in 2016, utility solar is expected to experience a reset in 2017," said GTM senior analyst Cory Honeyman, who expects the market will shrink to 10 GW. "But between 2018 and 2020, the extension of the ITC will reboot market growth for utility PV and support continued growth in distributed solar as a growing number of states reach grid parity."
The federal ITC provides a 30% tax incentive on all solar projects. In December 2015, Congress extended the credit to 2019 with a stepdown through 2022, and a project completion deadline of 2023 for some projects.