GTM: US solar market poised to triple in next five years

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Source: Flickr/USACE HQ

Following its biggest ever year in 2016, the cumulative US solar market is expected to nearly triple in size over the next five years, according to GTM Research and the Solar Energy Industries Association’s (SEIA) latest report.

As PV Tech previously reported, the US solar market nearly doubled its previous record last year, installing more than 14GW of solar PV.

For the first time ever, solar ranked as the number one source of new electric generating capacity brought online on an annual basis, representing 39%. On average, a new megawatt of solar PV came online every 36 minutes in 2016 and this momentum is set to continue.

Despite a slight dip expected in installed capacity this year, the market is still forecast to install an impressive 13.2GW of solar PV in 2017, a 10% drop from last year, but still 75% more than was installed in 2015. The dip will solely occur in the utility-scale segment; in response to an unprecedented number of utility-scale projects coming online in the latter half of 2016 in the aftermath of the ITC extension rush. This segment is expected to rebound by 2019 however, with year-over-year growth across the board.

“Though utility PV will reset 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,” said Cory 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.”

US PV Installations, 2010-2022E (MWdc). Source: GTM Research / SEIA U.S. Solar Market Insight report

The market will nevertheless be riding on the success of last year, that saw an almost 20% decrease in PV system pricing. This is the greatest average year-over-year price decline seen thus far.

“It would be hard to overstate how impressive 2016 was for the solar industry,” said 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 benefiting 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.”

Residential

The report forecasts the residential segment to grow 9% this year. California, which has historically accounted for nearly half of the residential market, is expected to decline in 2017; however, 36 of the 40 tracked states will grow year-over-year.

Commercial and industrial

The commercial and industrial (C&I) segment is expected to grow 11% year-over-year and install a record 1,756MW of solar PV in 2017. This is largely due to a growth in community solar in the nation – which has nearly quadrupled from 2015 to 2016 due to major installations in Minnesota and Massachusetts. This market is expected to represent 30% of the C&I segment in 2018.

By 2019, the US 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 1GW of operating solar PV, up from nine today.

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