USA Solar Market – Installation Numbers and Future

The USA solar market has been breaking records as prices have fallen and the government has been strong supporting the sector through subsidies in the form of tax credits. The country installed 4 GW of solar power in just Q3 alone making it one of the biggest markets in the world. This was a growth of 192% year on year and 99% quarter on quarter showing the strong surge in solar capacity.

There was a huge build in solar installations for the end of 2016 as the investment tax credit was supposed to expire by the end of the year. However, the ITC got extended but the projects that were started will get completed. Q4 will see another strong quarter with installation expected to increase another 10% to 4.8 GW leading to a strong 2016 for solar capacity. The USA market will install 14 GW this year which would make it’s the 2^nd largest market in the world implying a growth of 88% over 2015. This strong surge in solar energy is being driven by ITC expiration as well as the increasing competitiveness of solar energy when compared to other forms of energy.

The next year in solar energy for USA most probably will be weak as the ITC deadline is no longer there. There is also more uncertainty with the incoming administration which might change the subsidies and support for renewable energy. Donald Trump has appointed noted climate change skeptics in his administration and his support for the fossil fuel industry would be strong. The long term health of the industry is also in doubt as Trump is almost certain to scrap the clean power plan for the utility industry which would have given a boost for wind and solar energy installations.

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Next year promises to be one of the most uncertain for the solar industry with both China and USA to see major changes in terms of polices and subsidies. While the USA market has done well in all segments – residential, commercial and utility, the future is uncertain. With pushback from utilities and state energy commissions, residential solar is seeing a slowdown as net metering regulations are becoming more onerous. With the new Republican administration coming in, the state commission will not be too favorable towards the solar energy installations. Even the coal and gas industries will push against the solar energy which had pushed them into a corner.