PV price increases, supply chain issues and the anti-dumping circumvention trade case all took their toll on larger-scale U.S. solar installations in the first quarter. The U.S. solar industry had its lowest quarter of installations (3.9 GW) since the start of the coronavirus pandemic, according to the U.S. Solar Market Insight report released by the Solar Energy Industries Association (SEIA) and Wood Mackenzie — 24% less solar capacity than Q1 2021.
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This dip is just an appetizer of could have been this year. Forecasts for solar installations were dire until the White House’s executive action this week to provide a two-year suspension of any new solar tariffs. This certainty will avoid some of the massive project delays and cancellations that would have continued throughout 2022.
Still, over the last nine months, 2022 forecasts have been cut in half due to continued supply chain challenges and the anti-circumvention inquiry.
“The White House’s executive action brings relief to the US solar industry, which has been steeped in uncertainty regarding the anti-circumvention investigation initiated by the Department of Commerce in late March following a petition filed by Auxin Solar, a domestic module manufacturer,” said Michelle Davis, Wood Mackenzie’s principal analyst. “Despite this, this announcement is expected to create approximately 2-3 GW of upside potential to Wood Mackenzie’s 2022 base case outlook, assuming the global market resumes normal operations.”
The utility-scale solar market saw the sharpest decline in Q1 2022 and experienced its lowest quarter of installations since 2019 and the lowest number of new projects added to the pipeline since 2017.
The commercial solar market saw 28% quarter-over-quarter declines, while the community solar market shrank by 59% quarter-over-quarter.
Residential stays the course. Solar still accounted for 50% of all new electricity-generating capacity added in the U.S. in Q1, and the residential solar market continued to roll on with record-setting growth — 30% year over year increase — as customer demand and sales pipelines continue to increase.
Since the case was initiated in March, most solar module manufacturers have halted shipments to the United States, causing an industry-wide module shortage. These supply constraints are expected to ease as manufacturers ramp up shipments to the U.S. in the coming months.
“The solar industry is facing multiple challenges that are slowing America’s clean energy progress, but this week’s action from the Biden administration provides a jolt of certainty businesses need to keep projects moving and create jobs,” said SEIA president and CEO Abigail Ross Hopper. “President Biden has clearly taken notice of how drags on the industry are hampering grid resiliency. By acting decisively, this administration is breathing new life into the clean energy sector, while positioning the U.S. to be a global solar manufacturing leader.”
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