The US solar market grew 19% annually as it brought online 23.6 GW DC of new solar power capacity in the year 2021, which could have been higher had it not been for high solar prices, trade actions, legislative uncertainty and unprecedented supply chain challenges, according to the Solar Energy Industries Association (SEIA) and Wood Mackenzie.
Since 16.1 GW DC had been installed till September 2021, Q4/2021 additions were a total of 7.5 GW DC (see US Installed 5.4 GW DC New Solar In Q3/2021).
According to analysts of the report US Solar Market Insight Q4 2021, a 3rd of all utility scale solar capacity scheduled for completion in Q4/2021 was pushed by at least a quarter. At the same time, 13% of what was scheduled to come online in 2022 has also been delayed by a year or more or 'canceled outright'.
Utility scale installations were reported as close to 17 GW DC, 3 GW less than expected due to challenges related to logistics, supply chain constraints and trade headwinds. 'Multiple GWs' pushed their commercial operations dates to 2022 or later. For instance, fixed tilt projects saw annual prices having increased 18% and 14.2% for single-axis tracking projects. Q4/2021 additions were 5.9 GW DC and during this quarter, 4.6 GW DC worth of new contracts were signed, taking the total pipeline at 80.2 GW DC.
Analysts see another 15 GW DC coming up in 2022 as additions will be dependent on equipment supply availability.
With supply chain constraints continuing well into 2022, the analysts expect these to hit installations the hardest, reducing capacity by 7% compared to 2021, explained Principal Analyst at Wood Mackenzie and Lead Author of the report, Michelle Davis.
Of the total 23.6 GW DC installed, residential solar capacity contributed 4.2 GW DC which is annual record for this segment. The year also turned out to be the 1st when more than 50,000 projects were installed in a single year here. In Q4/2021, 1.156 GW DC was added.
Community solar installations grew 7% YoY to 957 MW DC. This segment faced interconnection challenges and supply chain constraints. In Q4/2021, the additions were a total of 355 MW DC.
The commercial PV segment grew with 397 MW DC in Q4/2021 to 1.435 GW DC in 2021.
The association demands a long-term extension of the solar Investment Tax Credit (ITC) and the government to invest in US manufacturing which will increase solar installations in the country by 66% over the next decade.
Analysts explain that under a ITC extension scenario over the next decade, residential installations in the US are likely to grow by 20%, non-residential 15% and utility scale by 86%. They count over 70 GW solar capacity additions annually by 2030 under this scenario.
The report writers point out that the near-term forecasts for 2021-2022 have gone down by 11 GW DC or 19% since the last report released for Q3/2021 highlighting the impacts of supply chain constraints and price increases over 2020.
But without any policy action, it would 'reach 39% of what's needed to hit President Biden's 2035 decarbonization target', from 120 GW DC cumulative installed now, to 464 GW DC by 2032.
"In the face of global supply uncertainty, we must ramp up clean energy production and eliminate our reliance on hostile nations for our energy needs," said SEIA CEO and president Abigail Ross Hopper. "America's energy independence relies on our ability to deploy solar, and the opportunity before us has never been more obvious or urgent."
The report can be purchased on Wood Mackenzie's website for $5,000.