A new report projects that the U.S. solar market will more than double this year, with an expected 119 percent growth, largely due to utilities increasing solar capacity.
Released by GTM Research and the Solar Industries Energy Association, the U.S. Solar Market Insight report forecasts that 16 gigawatts of solar will be installed in 2016, which breaks the record 2015 held at 7.3 gigawatts installed.
About 74 percent of the 2016 installations, the report notes, are due to utility-scale installations. That equates to about 12 gigawatts. Just five years ago, utility installations added just below .3 gigawatts, but utilities began adopting solar more readily, jumping to 2.9 gigawatts in 2013. Last year, utilities contributed about 4 gigawatts of new solar installations.
“As the double-digit gigawatt utility PV pipeline is built out in 2016, utility solar is expected to experience a reset in 2017,” said Cory Honeyman, GTM Research senior analyst. “But between 2018 and 2020, the extension of the ITC will reboot market growth for utility PV and support continued growth in distributed solar as a growing number of states reach grid parity.”
Residential installations will add 2.8 gigawatts, Bloomberg reports, with non-residential installations making up the remaining 1.2 gigawatts.
With the federal Investment Tax Credit — offering a 30 percent tax incentive — first scheduled to expire in 2016, many organizations planned solar projects to be completed this year, which is leading to the remarkable expected spike.
“Because of the strong demand for solar energy nationwide, and smart public policies like the ITC,” says Rhone Resch, SEIA president and CEO, “hundreds of thousands of well-paying solar jobs will be added in the next few years benefiting both America’s economy and the environment.”
The report also noted that, for the first time ever, capacity additions for solar beat out natural gas. In total, solar accounted for 29.4 percent of the U.S.’s new electric generating capacity.
Because the ITC has been extended through 2021, solid growth is expected to continue, albeit at a slower rate, in 2017 and beyond. The study estimates that by the end of 2020, cumulative solar installations will top 97 gigawatts — up from the current 25 — and account for 3.5 percent of the U.S.’s total electricity.
Is this the confirmation of the energy market trending toward solar? Or will this be a short-lived boost to a limited industry? Leave your comments below or tweet @KatieeMohr.