The US added only 2,044 MW of new solar power capacity in Q1/2017. While this is the sixth straight quarter for the country to install more than 2 GW of PV, it was a drop of 2% from the same period last year. However, the long-term outlook for the US remains uncertain with the Suniva petition.
Utility scale solar system prices dropped below the $1 per watt barrier for the first, as per US 'Solar Market Insight Report Q2/2017' by Solar Energy Industries Association (SEIA) and GTM Research. It represented more than half of all PV installed during the quarter. Most of this capacity came from projects that were slated for completion in 2016, but were pushed back with the extension of ITC. This ITC effect or 'spill-over' will continue in entire 2017 with the 30% tax credit in 2019, which spells good news for the sector.
In the residential solar segment, California remained the largest solar state with 35% market share. Yet, the segment dropped 17% from Q1/2016 owing to 'national installers pulling back operations in unprofitable geographies and customer acquisition challenges in more mature residential state markets like California', states the report.
Community solar remained a bright spot for the industry especially as it exhibited growth in Minnesota, registering overall YoY growth of around 30%.
The report forecasts 12.6 GW of new solar power capacity coming online in 2017, which would be 10% less than the 14.6 GW added in 2016 (see US Installed Over 14 GW Of Solar PV In 2016). In its Q4/2016 report, GTM was much more optimistic about 2017, expecting around 14 GW of newly installed capacity.
As for long term outlook of the sector, solar PV capacity is expected to nearly triple over the next five years, according to GTM Research. By 2022, more than 18 GW of solar PV capacity are anticipated to be installed on an annual basis.
However. if Suniva is successful with its claim and having the US administration implement a silicon PV module import price of 78 cents per W, GTM Research & SEIA believe it could raise system costs by 13% to 35%, depending on segment. A 78 cents/W price on modules would actually match 2012 levels for imported Chinese modules and put average system costs at 2015 levels.
GTM Research expects that 36 states beat grid parity for rooftop solar at the end of 2017 under current conditions, but 11 would fall out of grid parity if Suniva's proposal were approved in H2 2017 and took effect next year. Meanwhile, GTMR says that more than two-thirds of the current utility PV pipeline stems from projects that utilities procured outside an RPS mandate, based on its cost-competitiveness with natural-gas alternatives. On top of that, more than 60% of the current pipeline comes from projects that signed PPAs in2016 onward. Those 11 GWdc that support the near-term outlook are also at risk of project cancellation if module prices end up higher than developers' assumptions when they initially originated contracts with utilities, says GTMR.
With the above in mind, it remains to be seen how the International Trade Commission will ultimately rule on the Section 201 filing – an additional layer of uncertainty lies in how President Trump will respond to the ITC's recommendations, cautions GTMR. Adding, "But if Suniva's proposed minimum import price on modules and tariff on imported cells are approved, PV installations would significantly drop across all three market segments."
The full report can be purchased on GTM Research website.