The US solar market wasn't immune to the global increase in prices that for the utility scale segment increased at about 6% annually during Q2/2021, according to the Solar Energy Industries Association (SEIA) and Wood Mackenzie. While the analysts see solar developers having sufficient inventory for their projects in 2021, there will be price increases in 2022.
They count enforcement actions on Xinjiang metallurgical grade silicon and the tariff petitions within the US as near-term headwinds for the US solar market. In the near future, it will see the US Customs and Border Protection (CBP) detaining more solar equipment which will potentially delay projects (see Sign Of Times To Come? US Govt. Detaining PV Modules).
While the analysts believe manufacturers can adjust their supply chains, the petition filed to the US International Trade Commission (USITC) by unnamed companies demanding duties on Chinese companies trading imports from Malaysia, Thailand and Vietnam, they see a significant risk to the industry (see US Solar Manufacturers File Petitions Against Chinese).
"These countries account for roughly 80% of crystalline silicon module imports, and duties could average 50% or more, creating the potential for widespread module price impacts," reads the US Solar Market Insight: Q2 2021 report of the SEIA and Wood Mackenzie.
Q2/2021
As the industry battles these challenges, the US solar market continued its good run in the present with 5.7 GW DC new capacity installed during Q2/2021, having grown 45% over previous year's 3.5 GW DC (see US Installed 3.5 GW DC New Solar During Q2/2020). Compared to Q1/2021, the quarterly increase was 14% (see US Installed 5 GW DC New Solar Capacity In Q1/2021).
While utility scale additions accounted for 4.2 GW DC with Texas., Arizona and Florida alone accounting for nearly 3 GW, residential solar installations went up 46% to 974 MW DC, showing recovery from the COVID-19 impacted times. Community solar deployments improved 16% over Q2/2020 with 177 MW DC installed and commercial solar rose 31% with 354 MW DC.
The Utility scale solar contracted pipeline went up to around 85 GW DC thanks to 9.3 GW DC new PPAs signed during the quarter.
Solar PV accounted for 56% of all new electricity generating capacity the country added in H1/2021 as it officially crossed 3 million installations across all market segments, majorly in the residential segment. The cumulative installed solar PV capacity of the US increased to exceed 108 GW DC at the end of June 2021.
Between 2021 and 2026, the analysts see just over 20 GW of new annual solar capacity additions, which would be 'far short' of the deployments needed to meet President Joe Biden's 2035 clean energy targets. They estimate more than 80 GW of solar annually from 2022 through 2035 to meet the targets.
Not counting the current challenges the US solar industry faces, analysts believe once the solar Investment Tax Credit (ITC) completely phases down in 2024, there is likely to be a flatline growth in 2025 and 2026.
The report can be purchased from Wood Mackenzie's website for $5,000.
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