The U.S. solar industry faced its share of headwinds heading into 2019, but through it all, the industry showed remarkable resiliency and is poised to experience another year of solid growth.
The record-breaking pace of solar PV adoption in the United States showed little sign of letting up in 2019. This was the main takeaway of the most recent edition of the U.S. Solar Market Insight report, jointly put together by the Solar Energy Industries Association (SEIA) and Wood Mackenzie Power & Renewables.
The report highlights a number of accolades, including:
Residential solar capacity added in the U.S. in Q3 2019 hit a new record at over 700 MW.
California remains the largest residential solar market in the U.S., with a record-breaking 300 MW of residential solar capacity installed in Q3 2019.
The U.S. solar market installed 2.6 GW of solar electricity capacity in Q3 2019, representing a 45% increase from Q3 2018.
A cumulative total of 21.3 GW of new utility PV projects were announced in the first 3 quarters of 2019, bringing the total contracted utility PV pipeline to a record high 45.5 GW.
Total installed solar PV capacity in the U.S. is expected to more than double over the next 5 years.
The continued maturation of the residential and utility solar PV markets is especially noteworthy.
Not only was Q3 2019 the best quarter ever for installed residential solar PV capacity, but it was also the first quarter ever that a Northeast state – a region noted historically as being a national leader in residential solar – wasn’t listed among the top 5 state residential solar PV markets. The top 5 states instead include legacy markets like California, Florida, and Arizona but also emerging markets like Texas and Nevada. This reality shows both the maturation of the solar industry over the past couple decades and the room still left for the industry to grow as emerging state solar markets in the Sun Belt and Mountain West continue to take hold.
Source: Solar Tribune generated graphic; data from Wood Mackenzie/SEIA report
The surge in utility-scale solar PV growth is being driven primarily by corporate users that continue to be drawn to the falling costs associated with utility-scale solar. As we’ve documented before here at Solar Tribune, major corporations like Google, Amazon, Microsoft, Apple, and many others have signed on to significant power purchase agreements (PPAs) in recent years to help meet ambitious renewable energy goals. Approximately 4 GW of utility-scale projects that are expected to come online in 2020 will have a corporate user, representing just under 30% of the utility-scale solar market forecast in 2020.
Market pressure will cause more and more corporate users to make pledges to be powered 100% by renewables in the near future. This fact coupled with the demand by corporate users to take advantage of low-price PPAs before the step down of the solar Investment Tax Credit (ITC) points to there being little slow down in the utility-scale solar market. Cumulative figures for solar capacity in 2019 are not yet available, but the industry’s momentum is unmistakably strong.
Overcoming Tariffs, Trump, and Tumult
The fact that domestic solar energy production has grown so steadily in recent years is somewhat miraculous given the wholesale efforts by the Trump Administration to knock the industry down.
Reasonable people of all political stripes can debate how much effort the government should put into subsidizing the solar industry. However, its hard to justify the actions that the Trump Administration has pursued to cripple renewables – and prop up fossil fuels – unless done so on purely cynical political grounds.
Here’s just a sampling of Trump Administration policies that have undermined the solar industry:
Passed a tax reform package constraining financing for solar and wind projects.
Implemented a crippling 30% tariff on imported solar panels in 2018 that steps down by 5% in subsequent years.
Implemented a tariff on aluminum and steel imports in 2018, two commodities that are heavily relied upon in the solar industry.
Just months ago, the Trump Administration rescinded a tariff exemption on bifacial solar panels – which generate energy on both sides – so that they too will be subject to a 25% tariff.
These actions have made solar projects more expensive for consumers by hiking material costs and reducing attractive financing options. And this list doesn’t even include things like the rolling back of Obama-era regulations on power plant emissions and the withdraw from the Paris Climate Accord – symbolic gestures signaling the Administration’s lack of interest in investing in renewables.
Let’s be clear, the above actions by the Trump Administration have had a significantly negative impact on the solar industry, not to mention the untold number of people and families that rely on the industry for their livelihoods. An analysis by the SEIA notes that the tariffs imposed in January 2018 will wipe out over 62,000 jobs, $19B in investment and 10.5 GW of solar capacity. These estimates cover projected tariff impacts starting from the 2017 section 201 trade complaint filed by Suniva through the tariff life cycle ending in 2021.
Solar Continues to Trump Coal
President Trump has not made his love of the coal industry – and disdain of renewables – any secret. All evidence, however, continues to point to the Trump Administration’s all-out push to prop up the U.S. coal industry as being an exercise in futility.
The performance of the U.S. coal industry during the Trump Administration has mirrored much of what the industry has done this Century – it’s cratered. Don’t take my word for it, here’s what the Energy Information Administration (EIA) has to say:
“EIA expects U.S. coal production in 2019 to total 697 million short tons (MMst), which would be an 8% decline from the 2018 level. In 2020, EIA expects a further decrease in total U.S. coal production of 14%, to an annual total of 601 MMst, reflecting continued idling and closures of mines as a result of declining domestic demand.”
“EIA forecasts the share of U.S. electric generation from coal to average 25% in 2019 and 22% in 2020, down from 28% in 2018.”
Meanwhile, the Energy Information Administration (EIA) notes that the non-hydro renewables industry is expected to be the “fastest growing source of U.S. electricity generation for at least the next two years.” Trump’s own Department of Energy notes that solar installations since 2008 “have grown 35-fold to an estimated 62.5 gigawatts (GW) today.”
Despite a harsher regulatory environment in Washington over the past couple years, the U.S. solar industry has plenty of upward momentum. California’s solar mandate for new residences, an uptick in corporate procurement of solar power, and more investments in solar by utility companies across the country are all positive trends helping the solar industry overcome the obstacles that the Trump Administration has put in its way.
Cover Photo Source: Cnn.com