US Community Solar Sector Market Forecast To Grow By 2027: Wood Mackenzie

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Wood Mackenzie has revealed in its new research that the American community solar market will continue to grow over the next five years, with at least 7 GWdc of community solar expected to come online between 2022-2027.

The research by Wood Mackenzie in collaboration with the Coalition for Community Solar Access (CCSA), has said that the new program guidance and the potential new community solar markets will usher substantial growth for the US community solar market.

New and Leading Solar Markets

Wood Mackenzie has increased its 2022-2026 forecast by 477 MWdc, a relative 11% uptick when compared to former forecasts and extended its outlook to 2027. This rise can be attributed to the addition of new community solar markets, like New Mexico and Delaware, as well as modifications to existing state forecasts as state-level programs are expanded and rules updated.

Courtesy: Wood Mackenzie

Illinois and New York report the greatest state-level changes to the forecast. New York is expected to continue being the leading community solar market, with 1.3 GWdc coming online between 2022-2027.

Legislation For Community Solar Industry

“The community solar industry is a growing solar segment within the US, with several proposed new programs pending in state legislatures. Since the start of Q2 2022, 4.4 GWdc has been installed nationally and we expect to see more growth over the next five years as legacy markets expand their community solar programs and new states adopt community solar programs,” said Rachel Goldstein, US Solar Research Analyst for Wood Mackenzie.

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In the research report, Wood Mackenzie and CCSA have found that costs to acquire large customers are lower, but more variable, on a per watt basis than acquisition costs for residential customers.

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Wood Mackenzie findings have also highlighted that community solar-plus-storage can provide grid flexibility, but regulatory models do not currently recognize how these projects can manage load in the USA.

“Community solar-plus-storage could help manage the load on the distribution and provide grid flexibility, but so far, its scope is limited to a few states, and current rules do not necessarily value storage for its grid resilience capabilities,” Goldstein added.

In Massachusetts, there is a requirement for SMART-qualifying facilities greater than 500 kilowatts (kW) to be co-located with storage, while New York’s Value of Distributed Energy Resources (VDER) offers financial incentives for co-locating community solar with storage.

Wood Mackenzie also held that at present, community solar has begun to capture the imagination of people in a third of states. The Joe Biden Administration wants community solar to reach 5 million households by 2025 and create $1 billion in energy bill savings.