Solar Installations Expected to Quadruple by 2030
By Pippa Stevens, CNBC
U.S. solar installations reached a record high in 2020 as favorable economics, supportive policies and strong demand in the second half of the year offset the impact of the coronavirus pandemic.
Installations grew 43% year over year, reaching a record 19.2 gigawatts of new capacity, according to a report released Tuesday from the Solar Energy Industries Association and Wood Mackenzie.
In the fourth quarter alone, the U.S. added just over 8 GW of capacity — a quarterly record. That’s more than the capacity added in all of 2015, which was 7.5 GW. One gigawatt is enough to power roughly 190,000 homes. The U.S. currently has 97.2 GW of total solar capacity installed, enough to power roughly 17.7 million homes, according to SEIA.
California, Texas and Florida were the top three states for annual solar additions for the second year running. Virginia and North Carolina rounded out the top five.
Residential solar additions saw a record-setting sales pipeline in the second half of the year following a slowdown in the second quarter as the pandemic ground operations to a halt. Solar sales were boosted by customers interested in home improvements. The report’s authors also believe this momentum in the back half of the year likely continued into 2021.
On the utility solar front, annual capacity additions jumped 65% from the prior year. “The recent two-year extension of the investment tax credit (ITC) will drive greater solar adoption through 2025,” Wood Mackenzie senior analyst Michelle Davis said, referring to the tax credits extended in December as part of the coronavirus relief and government spending package.
The report said the credit’s two-year extension at the current level will lead to a 17% increase in solar deployment forecasts between 2021 and 2025.
In the U.S., solar represented 43% of all new electricity generating capacity added in 2020, its largest ever share of new generating capacity. Solar is also the cheapest form of new power in many places.
“Residential solar sales continue to exceed expectations as loan providers roll out attractive products, interest in home improvement surges, and customers suffering through power outages from extreme weather events seek energy resilience,” the report said.
The report also looked for the first time at growth forecasts through 2030, projecting that the U.S. solar market will quadruple from current levels by the end of the decade. The growth is expected to be spread across markets as customers, utilities, states and corporations push to decarbonize the grid. President Joe Biden called for an emissions-free power sector by 2035 as part of his $2 trillion infrastructure and climate package unveiled last July.
“Compelling economics for distributed and utility-scale solar along with decarbonization commitments from numerous stakeholders will result in a landmark installation rate of over 50 GWdc by the end of the decade,” Davis added.