Wood Mackenzie & CCSA Report: US Community Solar Installations to Exceed 14 GWdc by 2028

Wood Mackenzie and the Coalition for Community Solar Access (CCSA) have released a report forecasting significant growth in US cumulative community solar installations, expected to surpass 14 gigawatts direct current (GWdc) by 2028. Annual installation volumes have consistently reached around 1 GWdc for the past three years, with an anticipated average annual growth rate of 8% through 2028.

Caitlin Connelly, a research analyst and lead author of the report, highlighted that near-term growth is being driven by robust pipelines in existing state markets like New York and Illinois. Furthermore, newer state markets are expected to sustain long-term growth as mature markets reach saturation. Developers are also expected to benefit from incentives within the Inflation Reduction Act, starting this year.

Wood Mackenzie predicts that between 2024 and 2028, 7.6 GWdc of new community solar will come online in existing state markets, with the national market forecasted to exceed 10 GWdc of cumulative capacity by 2026.

Community solar installations reached 827 MWdc through Q3 2023, an 8% increase compared to the same period in 2022. In 2023, community solar accounted for 40% of total US non-residential solar capacity, with non-residential solar comprising 9% of total US solar capacity.

There’s a notable trend of community solar capacity increasingly serving residential customers, with the share serving low-to-moderate income (LMI) subscribers growing rapidly. The cost to subscribe LMI customers declined by 30% year-over-year.

The report also outlines alternative forecasts to address key market uncertainties, highlighting the impact of state and federal legislation on community solar markets.

Jeff Cramer, CEO of CCSA, emphasized the potential for growth in the community solar sector, with numerous states considering bills to create or expand community solar programs, along with federal support to accelerate deployment.

Looking ahead, energy storage is expected to become more prevalent in the community solar space as states prioritize grid flexibility. Storage attachment rates are increasing, particularly in Massachusetts and New York, where markets see significant community solar-plus-storage activity.

Furthermore, stakeholders anticipate the impacts of the Inflation Reduction Act, with awards for energy communities and LMI tax credit adders underway. Applications for the LMI adder exceeded available capacity by over eight times for certain sub-categories, indicating strong interest in these incentives. Additionally, awards from the $7 billion ‘Solar for All’ fund within the Greenhouse Gas Reduction Fund are expected by summer 2024.