The Wood Mackenzie-SEIA Q1/2020 US market report sees 33% annual increase in installations for 2020 to around 18 GW DC, a decline of 9% from previous forecast of 20 GW due to the pandemic’s impact
- Wood Mackenzie-SEIA reports claims 3.62 GW DC of new solar PV installations were reported in the US during Q1/2020
- Stay-at-home orders were starting to be implemented by some states in the country starting from the end of March 2020 which ensured Q1/2020 installations weren’t that impacted by the pandemic
- The market had utility scale PV installations of 2.3 GW DC, residential additions of 810 MW DC and non-residential deployments of 499 MW DC
- Report sees 33% annual increase in installations for 2020 to around 18 GW DC, a decline of 9% from previous forecast of 20 GW due to the pandemic’s impact
- Guidance is subject to uncertainty based on the unprecedented health, social and economic conditions in the country, caution analysts
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The Q2/2020 US Solar Market Insight report, by Wood Mackenzie Power & Renewables along with the Solar Energy Industries Association (SEIA), says the country installed 3.62 GW DC of new solar PV capacity in Q1/2020, growing 42% annually compared to 2.7 GW reported for Q1/2019.
For the 3.62 GW in Q1/2020, the report claims this is the country’s largest first quarter ever despite the COVID-19 pandemic outbreak. The analysts point out that stay-at-home orders had begun to be implemented by a handful of states by the end of March 2020 leading to marginal impact of the pandemic on Q1/2020 installations.
The growth was also thanks to over 2.3 GW DC of utility scale PV coming online during the quarter, which the report says is another Q1 record for the sector. The utility scale PV pipeline has now grown to 51 GW DC out of which 12.5 GW DC is under construction with 76% due for completion in 2020. The report sees utility scale PV sort of insulated from the impacts of the pandemic, as of now, as supply chain issues are not too grave and there are minimal additional delays due to the pandemic.
Problems that this segment is likely to face will be in the medium- and long-term, as auction procedures may be pushed back and there already are issues being faced for project financing. Riskier market conditions are pushing up project costs which may lead to power purchase agreement (PPA) price increases. The commercial and industrial (C&I) segment too may be impacted as prospective offtakers focus on core business functioning to sail through the troubled times.
Though the residential solar segment grew 31% YoY to 810 MW DC and non-residential PV rose 8% over last year to install 499 MW DC in Q1/2020, the report writers see both these segments declining 25% and 38% respectively for their annual installations this year, owing to construction and permitting delays along with drop in customer demand.
Despite challenges in various segments, the report forecasts 33% annual growth in 2020 for the US solar market to account for close to 18 GW DC installations, which is a 9% decline from its previous outlook of some 20 GW, after accounting for the pandemic impact. Wood Mackenzie-SEIA caution though that the guidance is subject to uncertainty based on the unprecedented health, social and economic conditions in the US.
“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.”
The complete report can be purchased on Wood Mackenzie’s website for $3,990.
Ever since the impact of the pandemic started reflecting on the US PV market, SEIA says the industry has had to face job loss for 72,000 Americans. In May 2020, SEIA said the pandemic is expected to take away 38% expected solar jobs in the US by June 2020 as solar deployment is expected to drop by 1.7 GW in Q2/2020 (see Over 30% Solar Jobs Loss in 36 US States).