Last year the U.S. installed 7.3 gigawatts of solar power, raising the total to 27.4 gigawatts of operating solar power throughout the country by the end of 2015. Basically in one year the U.S. installed more than a quarter of the solar power that's now online.
That sounds impressive until you hear that in 2016 the US is expected to install 16 gigawatts of solar power in 2016. That’s a 119 percent growth rate, and more than double the 7.3 gigawatts installed in 2015—which already was a record. That’s according to the annual U.S. Solar Market Insight Report 2015 Year in Review by GTM Research and the Solar Energy Industries Association (SEIA).
It will likely be much higher than in any year until 2020—largely because of something that didn’t happen—the end of the Investment Tax Credit (ITC). “With the federal ITC initially set to expire at the end of this year, developers and EPCs filled their pipelines with projects that would come on-line in 2016,” according to SEIA. “In December, however, an extension of the ITC provided long-term market certainty. Now, in 2016, state-level drivers and risks will move to the forefront and play even larger roles in the growth of both distributed and utility-scale solar.”
Utility-scale will comprise the overwhelming majority, roughly 74 percent new solar panel installations this year. But residential and commercial markets will also see growth in 2016.
“This is a new energy paradigm and the solar industry officially has a seat at the table with the largest energy producers,” said SEIA CEO Rhone Resch. “Because of the strong demand for solar energy nationwide, and smart public policies like the ITC and NEM, hundreds of thousands of well-paying solar jobs will be added in the next few years benefiting both America’s economy and the environment.”
The report said that new community solar programs and new utility-led efforts to allow corporate procurement of offsite solar will be drivers for the commercial side of solar. The commercial solar industry is expected to reach more than 100 megawatts (MWs) in 2016, in Colorado, Massachusetts and Minnesota.
“In 2016, the rooftop solar economic outlook will depend not only on favorable outcomes to net energy metering debates, but customer-wide and solar-specific rate structure reforms that can impact savings due to solar as well,” said GTM Research Senior Analyst Cory Honeyman.
The report also looked ahead to 2017. After the spike in installations in 2016 due to fears over the end of the ITC, the amount of new solar installed will reset to a more gradual pace. In 2017 it will reach 10 gigawatts. Utility-scale solar will experience a year-over-year drop while commercial and residential solar will grow.
“As the double-digit gigawatt utility PV pipeline is built out in 2016, utility solar is expected to experience a reset in 2017,” said Honeyman. “But between 2018 and 2020, the extension of the ITC will reboot market growth for utility PV and support continued growth in distributed solar as a growing number of states reach grid parity.”
The report also anticipated that by 2021 the solar market will install 20 gigawatts annually and it will reach a total of 100 gigawatts of solar in 2021.Tweet