SEIA Publishes the 2021 Solar Market Insight: What You Need to Know

Michael Tobias
Author : Michael Tobias
March 15, 2022
6 Minutes Read
  
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    KEY TAKEAWAYS

    - The US solar industry broke records in 2021 with 23.6 GW installed, bringing the cumulative capacity to 121.4 GW. Utility-scale solar power accounts for the largest share of new capacity, with 17 GW deployed.

    - Residential solar power is the second-largest market: 514,000 new PV systems were installed in 2021, adding 4.2 GW of capacity. Home solar power broke records, both in terms of capacity and the number of individual installations.

    - The commercial and community solar markets are smaller, with 1,435 MW and 957 MW of new capacity installed in 2021, respectively.

    - Texas has emerged as the top solar market with 6,060 MW installed, ahead of California with 3,640 MW. Florida has remained in third place with 1,660 MW deployed in 2022.

    The Solar Energy Industries Association (SEIA) publishes quarterly and annual reports, which provide the latest data about the US solar industry. The 2021 Solar Market Insight Report was published on March 10, 2022, and it reveals strong growth in spite of COVID-19 and global supply chain issues. The US surpassed 100 GW of photovoltaic capacity early in 2021, reaching 121.4 GW by the end of the year. The total electricity output of all solar PV arrays operating in the US is now enough to power 23.3 million homes.

    The utility-scale solar market is the largest by far, representing 17 GW of new capacity and 72% of the total growth in 2021. The residential market is in second place, accounting for 4.2 GW and nearly 18% of the total growth. The commercial solar market is still relatively small, with 1,435 MW of new capacity, while the community solar market added 957 MW.


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    California had been the top solar market for many years, but that spot has now been claimed by Texas. California installed 3,640 MW in 2021, but Texas installed 66% more capacity: 6,060 MW of solar power in a single year. There are four other states with more than 1,000 MW of solar power installed during the year: Florida (1,660 MW), Virginia (1,450 MW), Georgia (1,203 MW) and Indiana (1,142 MW).

    Residential Solar Power Broke 3 Records in 2021

    home solar power-1

    2021 has been the best year for the residential solar market in the US, with three new records in the industry:

    • The highest installed capacity in a single year: 4.2 GW
    • The highest installed capacity in a single quarter: 1,156 MW in Q4 2021
    • The largest number of installations in a single year: 514,000 new PV systems

    Residential solar installations increased by 30% compared with 2020, and this trend is expected to continue in 2022 with a 13% growth forecast. The outlook for 2023 is less favorable in California, since the new NEM 3.0 (Net Energy Metering) framework will greatly reduce the credits given for surplus solar power exported to the grid. As a consequence, the local home solar market is expected to shrink by 45% in 2023. However, the outlook remains positive for residential solar power in the rest of the US, with an 18% growth forecast.

    Compared with the utility-scale market, residential solar installations have been less affected by supply chain issues. Large projects depend on imported modules, and 13% of those scheduled for 2022 have been delayed. On the other hand, smaller home installations can easily switch to solar panels manufactured in North America when imports are delayed.

    The Installed Price of Solar PV Systems in 2021

    solar prices

    Inflation has been affecting all industries, and this is reflected in the price data gathered by the SEIA. However, the business case for going solar remains favorable, since electricity prices also increased in 2021. Solar panel systems are becoming more expensive, but their savings have also increased in proportion with kilowatt-hour prices.

    The latest Solar Market Insight compares solar PV system prices in Q4 2020 and Q4 2021, classifying projects into four categories: residential, commercial, fixed-tilt utility arrays, and tracking utility arrays.

    Solar Array Type

    Q4 2020 Price

    Q4 2021 Price

    Price Increase (%)

    Residential

    $2.97 / watt

    $3.10 / watt

    $0.13 / watt (4.4%)

    Commercial

    $1.36 / watt

    $1.55 / watt

    $0.19 / watt (14%)

    Fixed-tilt utility

    $0.80 / watt

    $0.94 / watt

    $0.14 / watt (17.5%)

    Tracking utility

    $0.93 / watt

    $1.06 / watt

    $0.13 / watt (14%)

    The residential solar market has experienced the smallest price increase, while fixed-tilt utility systems have suffered the largest increase. Tracking utility-scale and commercial solar power have seen a similar price increase in terms of percentage.

    US Solar Power Outlook for 2022 - 2032

    In their baseline scenario, the SEIA and Wood Mackenzie are forecasting a solar PV capacity of 464 GW by 2032, which represents a growth of over 280% from the 2021 report. However, they also modeled a 10-year extension of the federal tax credit, and the US can reach 700 GW by 2032 in this scenario - a 500% increase from today. This ITC extension is one of the measures proposed in the Build Back Better Act.

    The latest SEIA report also reveals that Texas has become the top solar market: 6,060 MW were installed in 2021, slightly over 25% of the total capacity installed (23.6 GW). The following table lists the top 5 solar states between 2019 and 2021, based on SEIA data:

    Rank

    2019

    2020

    2021

    #1

    California

    California

    Texas

    #2

    Texas

    Texas

    California

    #3

    Florida

    Florida

    Florida

    #4

    North Carolina

    Virginia

    Virginia

    #5

    Arizona

    North Carolina

    Georgia

    Solar photovoltaic power represents 46% of the total generation capacity added by the US in 2021, and there is a similar outlook for 2022. The US Energy Information Administration is forecasting 46.1 GW of new capacity for the year, and solar PV accounts for 21.5 GW.

    Tags Solar Power | solar energy | solar panels | SEIA | EIA

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