The 2017 solar market was no match for the record-shattering 2016, but strong photovoltaic (PV) additions prove the market is not yet saturated. According to the newly released U.S. Solar Market Insight Report 2017 Year-in-Review from GTM Research and the Solar Energy Industries Association (SEIA), the solar industry installed 10.6 gigawatts (GW) of new PV capacity in 2017, led by strong growth in the corporate and community solar segments. Though the installations show a 30 percent decrease from 2016, last year’s capacity addition still represents 40 percent growth over 2015’s installation total.
“The solar industry delivered impressively last year despite a trade case and market adjustments,” said SEIA President and CEO Abigail Ross Hopper. “Especially encouraging is the increasing geographic diversity in states deploying solar, from the Southeast to the Midwest, that led to a double-digit increase in total capacity.”
The non-residential market segment grew 28 percent year-over-year, making 2017 its fourth-straight year of annual growth. The growth was primarily driven by regulatory demand pull-in from looming policy deadlines in California and the Northeast. Community solar projects added to the ballooning non-residential market in Massachusetts, along with the continued build-out of a robust community solar pipeline in Minnesota.
"Minnesota headlined a banner year for community solar, with more megawatts installed in that state than total U.S. community solar installations in all of 2016," said Austin Perea, GTM Research solar analyst and co-author of the report. "We expect community solar to diversify geographically in 2018, with Maryland and New York to be key growth markets for the sub-segment beginning this year."
Residential and utility-scale segments saw installations fall on an annual basis for the first time since GTM Research and SEIA began publishing the report in 2010. The residential PV sector fell 16 percent from 2016, partially due to markets shifting away from rapid-expansion strategies.
A utility segment downturn was imminent, as numerous 2016 projects were rushed to beat the expiration of the 30 percent federal Investment Tax Credit. Then, as 2017 rounded into the fourth quarter, uncertainty surrounding the Section 201 tariffs caused many projects to be postponed or canceled. Price increases in most PV market segments stemmed from increases in module costs, as Tier 1 module supplies dipped amid impending tariffs. Interconnection delays also contributed to many projects spilling over into 2018.
In 2017, 30 percent of all new electric generating capacity brought online in the U.S. came from solar, ranking second during that period only to natural gas.
Of the top 10 state markets for residential solar in 2016, only two saw annual growth in 2017. However, 25 of the 44 states tracked in the report saw year-over-year growth in annual residential PV installations with several states climbing in the rankings.
Florida managed to break into the top 10 states for the first time since 2011, jumping to the No. 10 spot for cumulative solar capacity installed. Over the last year, South Carolina also saw big gains, moving up nine spots in the new rankings to No. 18 in the U.S.
California and North Carolina remain the two largest solar states after adding the most and second-most capacity in 2017, respectively.
Because of the federal and state policy changes and market dynamics, GTM Research lowered its base-case forecast for 2018-2022 by 13 percent. GTM Research forecasts another 10.6 GWdc (gigawatts direct current) of new PV installations in 2018. Total installed U.S. PV capacity is expected to more than double over the next five years, and by 2023, more than 15 GW of PV capacity will be installed annually, GTM predicts.