BOSTON, Mass. and WASHINGTON, D.C. - The Section 201 solar tariffs took a toll on utility-scale solar installations in the third quarter according to the U.S. Solar Market Insight Report for Q3 from Wood Mackenzie Power & Renewables and the Solar Energy Industries Association (SEIA). The residential market, meanwhile, continued to stabilize after a down 2017. Overall, the analysts expect 2018 growth to be flat.

For the first time since 2015, quarterly additions of utility-scale solar photovoltaics (PV) fell below 1 gigawatt (GW), highlighting the impact of the tariffs and the uncertainty surrounding them in late 2017 and early 2018. As a result, the U.S. solar market was down 15 percent year-over-year in the third quarter of the year, but the report notes that a strong project pipeline lies ahead.

“Developers originally planning to bring projects online in Q3 2018 were forced to push out completion dates to Q4 2018 or Q1 2019 due to uncertainty around tariffs,” said Colin Smith, Senior Analyst at Wood Mackenzie. “We did, however, see utility PV procurement outpace installations fourfold in Q3, showing that despite the tariffs causing project delays, there is substantial growth ahead for the U.S. utility PV sector.”

Even with the tariffs, the report forecasts 3.5 GW of utility PV for Q4 2018, and projects that the fourth quarter will be the largest quarter for utility PV installations since Q4 2016, as Wood Mackenzie expects many of the delayed projects to come online by the end of the year.

FIGURE: U.S. Utility PV Pipeline

Source: Wood Mackenzie Power & Renewables

On the residential side, Q3 was the third consecutive quarter in which residential PV was essentially flat or marginally up on both a year-over-year and quarter-over-quarter basis after the market had contracted by 15 percent in 2017. Nevada was a particular bright spot as the state experienced steady installation growth, and Florida is on pace for a strong year.

Slightly improving their 2018 forecast, Wood Mackenzie now expects a total of 11.1 GW of new PV installations to come online by the end of the year.

The report said there was positive quarterly growth in the non-residential solar segment despite a year-over-year decline. California’s commercial sector experienced solid growth and New York saw a record-breaking quarter. Minnesota’s community solar build out continued, with more than 400 megawatts added so far this year. 

“If not for the tariffs, the U.S. solar market would undoubtedly look better today than it does now,” said Abigail Ross Hopper, SEIA’s president and CEO. “However, as this report shows, this is a resilient industry that cannot be kept down for long. With smart policies in place, the potential for the solar industry is hard to overstate.”

Total installed U.S. PV capacity is expected to more than double over the next five years. By 2023, more than 14 GWdc of PV capacity will be installed annually.

FIGURE: U.S. PV Installation Forecast, 2010-2023E

Source: Wood Mackenzie Power & Renewables

KEY FIGURES

• In Q3 2018, the U.S. solar market installed 1.7 GWdc of solar PV, a 15% decrease from Q3 2017 and a 20% decrease from Q2 2018.
• The market stabilization of the residential sector continued this quarter. It was the third consecutive quarter in which residential PV was essentially flat on both a year-over-year and quarter-over-quarter basis after a year in which the market contracted by 15%.
• Non-residential PV grew 6% quarter-over-quarter and declined by 6% year-over-year.
• For the first time since 2015, quarterly additions of utility solar PV fell below 1 GWdc, highlighting the impact of the Section 201 module tariff uncertainty in late 2017 and early 2018.
• Wood Mackenzie expects 3.5 GWdc of utility PV to be installed in Q4, which would make it the largest quarter for utility PV installations since Q4 2016. Many projects that were on hold in the early part of the year due to tariff uncertainty are expected to come online later this year.
• Utility solar procurement has exploded in the aftermath of Section 201 tariff uncertainty. Thus far in 2018, 11.2 GWdc worth of projects have been announced.
• Wood Mackenzie forecasts virtually flat growth in 2018 vs. 2017, with 11.1 GWdc of new PV installations expected.
• Total installed U.S. PV capacity is expected to more than double over the next five years. By 2023, over 14 GWdc of PV capacity will be installed annually.

About U.S. Solar Market Insight:
The U.S. Solar Market Insight report is the most detailed and timely research available on the continuing growth and opportunity in the U.S. The report includes deep analysis of solar markets, technologies and pricing, identifying the key metrics that will help solar decision-makers navigate the market's current and forecasted trajectory. For more information, visit www.seia.org/smi.

About SEIA®:

Celebrating its 44th anniversary in 2018, the Solar Energy Industries Association® is the national trade association of the U.S. solar energy industry, which now employs more than 250,000 Americans. Through advocacy and education, SEIA® is building a strong solar industry to power America.  SEIA works with its 1,000 member companies to build jobs and diversity, champion the use of cost-competitive solar in America, remove market barriers and educate the public on the benefits of solar energy. Visit SEIA online at www.seia.org.

About Wood Mackenzie:
Wood Mackenzie, a Verisk Analytics business, is a trusted source of commercial intelligence for the world's natural resources sector. We empower clients to make better strategic decisions, providing objective analysis and advice on assets, companies and markets. For more information, visit: www.woodmac.com or follow us on Twitter @WoodMackenzie
 
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