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US poised to hit 336 GW of solar by 2027

US solar capacity is expected to grow from 129 GW today to 336 GW by 2027, according to the Solar Energy Industries Association and Wood Mackenzie.

From pv magazine USA

The Solar Energy Industries Association (SEIA) and Wood Mackenzie said in a new report that installed and operational solar capacity could surge from 129 GW at present to 335 GW by 2027.

Despite this rapid growth, projections for this year have been trimmed to 15.7 GW due to the lingering effects of the US Department of Commerce’s investigation into antidumping violations by major international solar panel suppliers. Ongoing international trade and labor concerns, including the Uyghur Forced Labor Prevention Act (UFLPA), could continue to challenge supply and limit deployment in 2023. The full benefits of the IRA might not be reflected in deployment until 2024 at earliest, said the report.

Solar accounted for 39% of all new capacity additions in the first half of 2022. The US solar market now represents about 4.5% of the nation’s electricity mix. Perhaps the most significant development in the Inflation Reduction Act for the solar industry was the long-term extension of the Investment Tax Credit (ITC) at 30%.

“The Inflation Reduction Act has given the solar industry the most long-term certainty it has ever had,” said Michelle Davis, principal analyst at Wood Mackenzie and lead author of the report. “Ten years of investment tax credits stands in stark contrast to the one-, two-, or five-year extensions that the industry has experienced in the last decade. It’s not an overstatement to say that the IRA will lead to a new era for the US solar industry.”

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For the fifth quarter in a row, residential solar had record deployment with 1.36 GW installed, a 37% increase over the second quarter of 2021. This represents nearly 180,000 residential customers installing solar in one quarter. The report said customer demand was strong due in part to power outages and to power price increases. Residential solar installations may drop slightly next year as California’s NEM 3.0 policy takes effect.

Commercial solar installed 336 MW in the second quarter, down 7% year on year, while 2.7 GW of utility-scale solar was deployed, down 25% decrease from the second quarter of 2021. The extension and expansion of the ITC and other provisions in the IRA boosted Wood Mackenzie’s five-year outlook by 52 GW (47%) over previous projections.

Community solar deployment projects were lifted by 18% compared to the previous outlook. President Joe Biden’s executive order has brought relief to the industry, but most of the additions come from Maine and New York. The two states accounted for 72% of the community solar capacity additions in the first half of 2022. In Maine, Net Energy Billing (NEB) projects that are not wrapped up in the state’s interconnection studies are coming online at a fast pace. In New York, Community Adder projects continue to come online, with a healthy pipeline remaining.

System prices continued to climb in the second quarter across market segments, mostly due to module price increases. System pricing increased year on year by 9% for residential, 8% for commercial, 8% for utility fixed-tilt, and 13% for utility single-axis tracking solar projects.

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Source: pv magazine