WASHINGTON, D.C. — Companies across the United States are investing in record-levels of solar and energy storage to power their operations. According to the Solar Energy Industries Association's (SEIA's) new Solar Means Business. Contact online >>
WASHINGTON, D.C. — Companies across the United States are investing in record-levels of solar and energy storage to power their operations. According to the Solar Energy Industries Association''s (SEIA''s) new Solar Means Business...
BOSTON, Mass. — Today the Massachusetts Legislature passed Senate Bill 2967, critical bipartisan legislation that addresses key challenges facing the solar and storage industry in the Commonwealth. The bill now goes to Governor Maura Healey''s...
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The Solar Energy Industries Association® (SEIA) is leading the transformation to a clean energy economy. SEIA works with its 1,200 member companies and other strategic partners to fight for policies that create jobs in every community and shape fair market rules that promote competition and the growth of reliable, low-cost solar power.
Founded in 1974, SEIA is the national trade association for the solar and solar + storage industries, building a comprehensive vision for the Solar+ Decade through research, education and advocacy.
Expectations for 2024 remain on track with some slight downgrades
Our expectations for 2024 solar installations are just 2% lower than they were last quarter – 38.9 GWdc compared to last quarter''s 39.7 GWdc. Every market segment has been downgraded slightly for various reasons.
We now expect residential solar to shrink 19% this year compared to our previous expectation of a 14% decline. Second quarter volumes were less than expected, driven strongly by only 230 MWdc of residential installations in California, the lowest quarter since 2020. But most states saw quarterly declines – sustained high interest rates combined with retail rate declines in some states continue to temper consumers'' appetite for residential solar.
Several factors have driven the downgrade in our expectations for residential solar this year. Installers and sales companies report lackluster sales volumes in the last several months. Typically, Q1 is the slowest quarter for residential solar, and sales activity picks up in the spring and continues to grow throughout the year. After a slow first quarter, installers hoped their volumes would recover in the spring and early summer, but this hasn''t been the case. Furthermore, major bankruptcies (Titan Solar and SunPower) will contribute to lower installation volumes in the near term. These factors have driven the downgrade in our expectations for residential solar – we expect 5.6 GWdc of installations compared to last year''s 6.9 GWdc.
Commercial solar is expected to grow 8% this year and community solar is expected to be flat compared to 2023. Our outlooks for these segments have been reduced slightly to account for modest second quarter installations. California installed a decent volume of commercial solar projects as the backlog of NEM 2.0 projects continued to interconnect. But other key states were either flat or down in the second quarter.
Utility-scale solar installations are forecast to reach 29.8 GWdc this year, a 2% decline from 2023. As mentioned previously, the segment had a healthy second quarter. But we have heard of some projects getting delayed to 2025 due to lengthening lead times for critical electrical equipment and limited labor availability from EPC firms. Consequently, our outlook for 2025 has increased by more than 2 GW to 31.5 GWdc.
We''ve been monitoring the potential impacts of the latest antidumping and countervailing duties (AD/CVD) since they were proposed by a group of US solar manufacturers in April 2024. These petitions were filed with the US Department of Commerce (DOC) and the US International Trade Commission (USITC) seeking new AD/CVD tariffs on imports of crystalline silicon solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam (CMTV). If enacted, tariffs would also apply to imports of modules produced outside the targeted countries with cells produced in those countries.
The deadlines for the preliminary determinations have been postponed – the deadline for the CVD preliminary determination is now September 27 and the deadline for the AD determination is now November 27. The petitioners have also filed a request for a finding of critical circumstances in the Thailand and Vietnam investigations, which could result in collection of duties retroactive to 90 days prior to the date of publication of the preliminary determinations.
There is considerable uncertainty surrounding these potential tariffs. It will be some time before the industry knows whether the tariffs will be enacted, and if they are, at what tariff levels for various companies and countries. However, the prospect of tariffs has already impacted the industry. Given the questions surrounding these potential tariffs, we have incorporated their impact into our solar outlooks with some assumptions.
We expect negligible impacts on the utility-scale segment for a few reasons. First, there is a substantial amount of module inventory (including both crystalline silicon and non-subject thin film) already allocated to current projects – we''ve tracked 35 GW as of the end of the first quarter (see our insight piece "Navigating turbulence in the US solar supply chain" for more details). Many of these projects have already begun construction. This inventory is expected to supply projects through the end of this year and potentially for part of next year.
Second, the global solar supply chain has expanded considerably in the last two years. Major suppliers are either shifting their cell and module supply chains outside of the targeted countries or have already done so. Developers either have access to previously imported inventory, domestic sources, and non-subject thin film supply, or will be importing equipment from outside the targeted countries. Developers report that their projects would remain on track, and thus, our utility-scale forecasts are not impacted by potential new tariffs.
The final impacts of any new AD/CVD tariffs are still uncertain, in part because modules and cells subject to last year''s finalized anticircumvention AD/CVD tariffs are outside the scope of these new tariffs. It is also worth noting that these prospective tariffs could strain some domestic module manufacturers that planned on importing cells from the impacted countries. Wood Mackenzie will continue to monitor and track the situation.
The US solar industry remains the foundation of the energy transition, but more support is needed
From 2024 through 2029, the US solar industry is on track to install over 250 GWdc of capacity. Annual growth will average 4% from 2025 onward, with some segments growing faster than others. The solar industry continues to be the leading technology of the energy transition. But the solar industry continues to face challenges and uncertainty, such as navigating continued shortages of critical electrical equipment, the outcomes of the AD/CVD preliminary determinations, and the political environment. These developments, amongst others, will influence the solar industry''s growth trajectory. More support will be needed to accelerate growth beyond our forecast and achieve carbon emissions reduction goals.
The residential solar market''s downturn continued into the second quarter
As a result of these trends, the residential solar market''s outlook for 2024 was reduced by 5% this quarter. Based on low installed capacity in the first half of the year, a weaker seasonal uptick in sales, some major installer exits, and fewer interest rate cuts than expected, Wood Mackenzie now expects a 19% year-over-year reduction in residential installations in 2024. California volumes are expected to drop by 41% compared to 2023. California made up over 30% of residential solar capacity additions in 2023 and the state contributes significantly to our expectations of a national contraction. We now expect an 8% decline in residential installations for all states other than California in 2024.
We do expect a residential solar market recovery in 2025, with continued growth through the remainder of our five-year outlook. However, we expect that the potential new Southeast Asian AD/CVD tariffs will impact this growth, which reduces our 2025-2029 outlook by 2%. There is a greater impact in the near term as domestic and alternative sources of supply have not fully ramped up to meet demand. The residential solar market will still grow by 14% in 2025, fueled by momentum in the third-party ownership segment and qualification for the ITC bonus adders, especially domestic content. In the long term, the market will add over 33 GWdc between 2026 and 2029 as growth in emerging markets picks up and retail electricity rates increase.
Note on market segmentation: Commercial solar encompasses distributed solar projects with commercial, industrial, agricultural, school, government, or nonprofit offtakers, including remotely net-metered projects. This excludes community solar (covered in the following section).
California''s NEM 2.0 projects contribute to quarter of single-digit growth for commercial solar
Market uncertainty has increased for commercial solar developers as they navigate the likelihood of receiving the domestic content adder and the looming possibility of new AD/CVD tariffs. To combat this, developers are spending an increasing amount of time on creating strategies to stabilize processes and minimize contract risk.
Note on market segmentation: Community solar projects are part of formal programs where multiple residential and non-residential customers can subscribe to the power produced by a local solar project and receive credits on their utility bills.
The top three community solar state markets made up 73% of total interconnected capacity in H1 2024
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