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U.S. Solar Industry Sees Worst Quarter Since 2020 Says Report

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According to the U.S., the quarter with the lowest number of solar installations in the U.S. since the outbreak of the coronavirus pandemic was the quarter that saw the least amount of installations. Solar Market Insight report was released recently by the Solar Energy Industries Association and Wood Mackenzie (a Verisk company). The industry installed 24% less solar capacity in Q1 2022 than Q1 2021 due to price increases and supply chain restrictions.

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This week, the White House took an executive action to suspend any new solar tariffs for two years. It gives businesses confidence to move forward with projects that were delayed by the anti-circumvention investigation of Department of Commerce. This action prevented massive project cancellations and delays that would have continued into 2022, which would have put President Biden’s climate goals in jeopardy.

Most solar module manufacturers have stopped shipments to the United States since March. This has caused an industry-wide shortage of modules. As manufacturers increase shipments to the U.S., these supply issues are expected to decrease.

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“The solar industry faces multiple challenges that slow America’s progress in clean energy, but this week’s action by the Biden administration provides a jolt to businesses need to keep projects moving forward and create jobs,” stated Abigail Ross Hopper, SEIA president/CEO. “President Biden clearly has noticed how grid resilience is being hampered by the industry’s drags,” said Abigail Ross Hopper, SEIA president and CEO. This administration is bringing new life to the clean energy sector and positioning the United States as a global leader in solar manufacturing.

The anti-circumvention inquiry and continued supply chain challenges have caused 2022 forecasts to be cut in half over the past nine months.

Michelle Davis, Wood Mackenzie’s principal analyst, stated that the White House’s executive actions provide relief for the US solar industry. The industry has been mired in uncertainty about the anti-circumvention investigation launched by the Department of Commerce in March after a petition was filed by Auxin Solar. Auxin Solar is a domestic module maker.

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Davis said, “Despite this, Wood Mackenzie’s announcement is expected to create approximately 2-3GW of upside potential for Wood Mackenzie’s 2022 base case outlook,” Davis added.

The market for utility-scale solar saw the greatest decline in Q1 2022. It experienced its lowest quarter since 2019, and had the fewest new projects since 2017.

The commercial solar market saw 28% quarter-over-quarter declines, while the community solar market shrank by 59% quarter-over-quarter. The residential market, however, saw record-setting growth in Q1, as customers continue to demand it and the pipelines for new orders.

The solar market now has trade certainty and is watching the fate of federal reconciliation bills on clean energy policies. Manufacturing incentives, long-term tax credits and other provisions will greatly increase solar and storage deployment, helping President Biden achieve his clean energy goals.

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