Wood Mackenzie and CCSA’s latest report on US community solar market forecast cumulative to reach 14 GW DC by 2029
This will include 7.3 GW DC new additions by 2029, driven mainly by established markets
The volume can further go up if other state markets bring in supportive legislations
By 2029, the US community solar market is expected to add 7.3 GW DC new capacity, exceeding the cumulative installed capacity of this segment to exceed 14 GW DC, forecasts the latest report from Wood Mackenzie released in collaboration with the Coalition for Community Solar Access (CCSA).
This new capacity is forecast to come online in existing state markets of the country where program pipelines remain strong. However, as these saturate in the years to come, they will not be able to sustain annual growth.
Hence, the analysts forecast an average annual growth rate of 5% for this market segment through 2026, and contract by 11% on an average through 2029. It can grow stronger provided new state markets come up.
In the bull case scenario, the report writers increase their 5-year outlook for this segment by 21% in existing markets compared to the base case scenario. Under the bear case, there is a 20% decline.
Lead Author of the report and Wood Mackenzie’s Senior Research Analyst Caitlin Connolly added, “Without a major market entrant like California, long-term community solar growth will largely depend on the enactment of legislation to enable new state markets.”
Its alternative scenarios do not factor in the establishment of new markets such as Ohio, Pennsylvania, Michigan, and Wisconsin that have significant interest and pre-development project pipelines.
If these markets act on their proposed legislations, Wood Mackenzie’s forecast can increase by at least 17% from the base case. It will then take the cumulative national capacity to 17.1 GW DC by 2029.
Analysts foresee 3.6 GW DC of community solar capacity to serve low-to-moderate income (LMI) subscribers by 2029 which in Q1 2024 stood at 829 MW DC. The share of community solar dedicated to LMI subscribers will grow to nearly 25% by 2025, according to their analysis.
According to the report, LMI subscribers remain the costliest to acquire for subscriber management companies as their costs average $113/kW which is 27% higher than the average cost for non-LMI subscribers. Outsourcing subscriber acquisition to 3rd parties can help developers save costs.
As for federal incentives, the Inflation Reduction Act (IRA) offers several incentives for community solar developers, however these are ‘difficult to count on’, according to Connolly.
Around 2 years back in August 2022, Wood Mackenzie and CCSA forecast a minimum of 7 GW DC community solar capacity additions in the US between 2022 and 2027 (see US Community Solar To Grow By 7 GW DC By 2027).