Natural gas is still the main power source in the US, generating 40% of the power consumed according to the Energy Information Administration. However, renewables have been growing at a fast pace, especially during 2021. According to the latest quarterly report from the Solar Energy Industries Association (SEIA), the US added 15.7 GW of solar power from Q1 to Q3 2021. The cumulative capacity for the year will most likely exceed 20 GW when the Q4 results are added.
Early in 2021, the US solar industry reached an important milestone with more than 100 GW of installed capacity. The SEIA and Wood Mackenzie had previously forecast 250 GW by 2026, and now the projection has been updated to 300 GW with a potential extension of the federal tax credit. The utility-scale solar segment continues to lead growth, with 3.8 GW installed during Q3 2021. However, the residential sector broke records with more than 1 GW deployed in a single quarter.
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In spite of the positive outlook, the US solar industry is threatened by the disruptions that have been affecting global supply chains during 2021. This issue has two main consequences: higher prices and delayed projects. The SEIA has forecast that 7.4 GW of solar projects could be delayed in 2022 due to supply chain problems.
New Record: One Gigawatt of Home Solar Systems in One Quarter
If you check the latest edition of the US Solar Market Insight Report from the SEIA, published on December 14, you will notice how the report emphasizes the residential market. 1,073 MW of home solar power were installed in July-September 2021, and this is the cumulative results of more than 130,000 installations.
Although Texas has been the largest solar market in 2021, California remains on top in the residential segment, with 373 MW deployed during Q3. This represents more than one-third of home solar installations during the third quarter. Texas was in second place during Q3, with 90 MW deployed.
- Home solar power is on the rise, both compared with the previous quarter and one year ago.
- The SEIA reported an 8% increase from Q2 2021, and an impressive 39% increase from the same quarter last year (Q3 2020).
The SEIA reported a slight increase in the price of solar power systems, and the US average increased from $3.03/watt in Q2 to $3.06/watt in Q3 in the residential sector. Inflation and slow supply chains are the main causes behind the price increase in the solar industry, but the effect was relatively small for home systems (less than 1%).
Texas Is Now the Top Solar State
California was the largest solar market for many years, and there was a time when the state had half of the total US capacity. However, the data gathered by the SEIA and Wood Mackenzie has revealed that the hub of solar activity is shifting to Texas.
- According to their latest report, Texas deployed 4,523 MW between January and September 2021, while California was in second place with 1,899 MW installed.
- Florida follows in third place, with 1,299 MW during the first three quarters of 2021.
For comparison, California was on top during 2019 and 2020, with 3,112 MW and 3,917 MW. Texas was in second place during both years, installing 1,412 MW and 3,426 MW. Florida remained the third largest solar market during those years as well, with 1,367 MW and 2,827 MW.
Texas is already the leading wind power state: there are nearly 130 GW of wind turbine capacity in the US, and Texas currently has 38 GW (over 29% of the total). Now that solar power is also growing fast in the state, Texas is on track to becoming the top market for renewables.
New York has also remained among the top 10 solar markets for three years in a row, occupying place #8 in 2019 and 2020, and place #9 in 2021. New York is one of the states with the most incentives for solar power, including a local tax credit in addition to the federal incentive, and rebates from the NY-Sun program. In the case of NYC, solar power also gives building owners an excellent opportunity to reduce emissions, which is necessary to meet Local Law 97 of 2019.