US Solar Ekes Out Just Over 2 GW In Lowest Quarter Since 2015 As Uncertainty Reigns

The US solar industry installed 2,031 megawatts in the third quarter of 2017, in its eighth consecutive quarter in excess of 2 gigawatts, but its smallest quarter for two years, as political uncertainty and increasing prices shuttered the industry’s recent success.

New figures published this week by GTM Research and the Solar Energy Industries Association (SEIA) in its latest US Solar Market Insight report, revealing that even though the US solar industry managed to scrape past the 2 gigawatt (GW) mark in the third quarter, reaching a total of 2,031 megawatts (MW), it was nevertheless the industry’s worst quarter in two years. GTM and the SEIA place the blame on a series of issues facing the industry, including significant political uncertainty, rising equipment prices, plateauing of maturing markets, and a churn within residential installer rankings.

However, despite the difficulties, the US solar industry nevertheless added 25% of new capacity additions through the first three quarters of the year, second only to natural gas capacity additions.

US Quarterly PV Installations, Q1 2012-Q3 2017

“The solar industry is a resilient bunch, but this quarter shows us what happens when policy uncertainty becomes a disruptive factor: prices rise, supplies shift and the market reacts accordingly,” said Abigail Ross Hopper, SEIA’s president and CEO. “We urge President Trump to reject tariffs and allow solar to continue its amazing growth for the U.S. economy, national security and American families in all 50 states.”

Not only was the third quarter its worst quarter in years, but 2017 is so far turning into a bit of a lackluster year, with year-to-date capacity additions down 22% on the same point a year ago. That being said, that is in line with the 21% decline expected between 2016 and 2017, and GTM Research predicts that the US solar industry will install a total of 11.8 GW worth of new solar this year — a forecast which has had to be adjusted downward from the originally expected 12.4 GW.

The third quarter saw the US solar industry install 481 MW worth of non-residential solar PV, a growth of 22% year-over-year, compared to 517 MW worth of residential solar PV which was 10% down from the second quarter and down 18% year-over-year, and a total of 1,033 MW of utility-scale solar PV.

“The year 2017 has been unconventional for solar in the sense that utility and residential PV, which have historically been the market’s major growth segments, are actually expected to decline in 2017,” explained GTM Research Solar Analyst Austin Perea.

“For utility PV this is largely a function of comparing the record-breaking ITC demand-pull in effect of 2016 to more modest build-out in 2017, while significant customer acquisition issues remain a challenge for residential solar. Conversely, non-residential solar, the smallest and most historically beleaguered sector, is expected to grow in 2017 in large part due to robust community solar build-out and regulatory demand pull-in across major state markets.

“Regulatory demand pull-in was the primary market mover in Q3, as developers in California, Massachusetts and New York rushed to install projects to qualify for more favorable time-of-use periods, expiring incentive programs and grandfathering provisions. Meanwhile, non-residential solar in Minnesota experienced its largest quarter ever as the build-out of Xcel Energy’s robust community solar pipeline comes on-line.”

A tough quarter is not unexpected, given the significant impact of Donald Trump’s Presidency and the subsequent US International Trade Commission decision to rule in favor of claimants and impose as-yet unspecified trade remedies on foreign-manufactured solar cells and modules. The fact that Donald Trump has yet to finalize the issue only increases the uncertainty and fear. Add to this the current uncertainty caused by Republican lawmakers seeking to pass tax legislation which will only increase the risk for the solar industry with potential changes to the Investment and Production Tax Credits.