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US Solar Energy Market Eclipses 100 Gigawatts

June 15, 2021 by Dan McCue

WASHINGTON – The U.S. solar energy market has surpassed 100 gigawatts of installed electric generating capacity, doubling the size of the industry over the last three-and-a-half years, according to a new report from the Solar Energy Industries Association and Wood Mackenzie.

The market insight report covering industry developments up to and including the second quarter of this year, also found that the solar energy industry now accounts for 58% of all new electric generating capacity.

“It’s incredible to see the solar industry pass 100 gigawatts after the policy and regulatory hurdles we’ve faced over the last few years,” said Abigail Ross Hopper, president and CEO of the association. 

“While we’re poised for more growth, we must accelerate solar and storage deployment to address the climate crisis and reach President Biden’s ambitious clean energy goals. Long-term policy certainty is the best way to do that, and we’re urging Congress to act this summer,” she said.

The U.S. solar industry installed 5 GW of new capacity in the first quarter of 2021, a 46% increase over the first quarter of 2020. 

Incidentally, 1 GW of power is enough energy to support about 300,000 homes, according to industry estimates.

The utility-scale sector accounts for a majority of these installations, with a first quarter record of 3.6 GW. Residential solar sales continued to grow, with the sector adding 905 megawatts in the first quarter 2021, an 11% increase over the same period last year.

For the first time, the U.S. Solar Market Insight report breaks out commercial and community solar as separate market segments. The commercial sector grew by 19% from the first quarter of 2020 and the community solar sector declined 15% from the first quarter of 2020.

Texas led all states with 1.52 GW of new solar capacity in the first quarter, more than it added in all of 2019 and three times more than any other state. Indiana, Virginia, Michigan, and Iowa were among the top 10 solar states this quarter.

According to forecasts from Wood Mackenzie, the solar Investment Tax Credit will continue to be highly influential and will drive record growth and investment over the next three years. The forecast calls for 160 GW of solar capacity to be installed from 2021 to 2026, bringing total installed photovoltaic solar capacity to more than 250 GW by the end of 2026.

The report also calls attention to rising costs in the solar industry and helps to explain the dynamics at play. While average solar system prices remained relatively stable from the fourth quarter of 2020 to the first quarter of 2021, key inputs for solar modules and installations, including polysilicon, steel, aluminum, semiconductor chips, copper and other metals, are facing supply constraints. Compounding cost increases across all materials started at the end of the first quarter and are beginning to affect installers now.

“Demand for solar power continues to grow, but attention is now turning to supply chain constraints, which have heightened since the latter half of 2020,” said Michelle Davis, principal analyst and lead author of the report. “There is a lag between commodity prices and subsequent solar system prices. But there’s no doubt this is impacting the solar industry. Installers are managing current equipment shortages and having to decide whether to renegotiate contracts.”

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