US Solar Market Sets Q1 Record, Impact of COVID-19 Likely on Q2: Report

Major US Firms Announces Financing & Investments for Solar Projects, Energy Storage

The US solar market installed 3.6 GW of new solar PV capacity in Q1 2020, representing its largest first quarter ever in the United States.

The US solar market installed 3.6 gigawatts (GW) of new solar photovoltaic (PV) capacity in Q1 2020, representing its largest first quarter (Q1) ever in the United States. According to the US Solar Market Insight Q2 2020 report, released by the Solar Energy Industries Association (SEIA) and research agency – Wood Mackenzie, the coronavirus pandemic is having a significant impact on the US solar industry which will be better witness in the second quarter of the fiscal. Construction has been delayed, customer demand has dropped and access to financing for projects of all sizes has been challenged.

“The solar industry has certainly been impacted by the pandemic, resulting in uncertainty for businesses and 72,000 Americans out of a job,” said Abigail Ross Hopper, SEIA’s president and CEO, in reference to recent analysis from SEIA. “Our industry remains one of the fastest-growing industries in the country, and with simple policy action now, we are ready to lead our economic recovery and provide new hope for out of work Americans in the second half of this year.”

Forecasts show that in 2020 the residential and non-residential markets will see 25 percent and 38 percent decreases in year-over-year installation volumes, respectively, as the segments face challenges posed by work stoppages, permitting delays and drops in consumer demand. Distributed markets will see a combined 32 percent less solar installed in 2020 than forecast before the pandemic.

Overall, however, Wood Mackenzie forecasts 33 percent growth in 2020, owing entirely to the strong performance of the utility-scale segment, which is expected to account for more than 14 GW of new installations this year.

The report further adds that record utility-scale procurement totals in 2019 and Q1 2020 positioned the segment for a record year, even as large-scale projects face some construction delays and challenges in financing and developing early-stage projects.

“While the utility segment shows promise with sustained levels of procurement so far, lower energy demand due to productivity loss and wholesale electricity market price drops will add to the uncertainty,” said Ravi Manghani, Head of Solar at Wood Mackenzie. “All in all, the pandemic and the ensuing economic slowdown will weigh heavily on the solar industry in the coming months if the economy is slow to recover and financing dries up.”

Key findings from the report:

• In Q1 2020, solar accounted for nearly 40 percent of all new electricity generating capacity added in the United States.
• In Q1 2020, the US solar market installed 3.6 GWdc of solar PV, the largest Q1 on record by nearly a gigawatt.
• The impact of coronavirus has been felt most acutely in distributed solar, which is expected to see 31 percent fewer installations than 2019 as installers face work stoppages and sales strategy transitions and the impending recession reduces consumer and business appetite for large investments.
• Wood Mackenzie forecasts 33 percent annual growth in 2020, with nearly 18 GWdc of installations expected. Due to the coronavirus pandemic, there is now a 9 percent reduction (1.7 GW) to the previous market outlook, where nearly 20 GW of solar was forecast for 2020. 
• In total, the US solar market will install 113 GW of solar from 2020-2025, a loss of 3.6 GW relative to our 2019 Year-in-Review report.

As per the report, beyond 2020, all market segments face considerable uncertainty caused by the pandemic, resulting in a downward revision of 3.6 GW to the 2020-2025 forecasts relative to last quarter. Growth will be contingent on economies reopening, recovery of consumer and business demand, financial market stability and a resumption of growth in electricity demand.