The quarterly Solar Market Insight Report provides detailed information about the US solar industry, which includes the installed capacity and typical costs by market segment: residential, commercial and utility scale. The SMI report is a collaborative effort between the Solar Energy Industries Association and consulting firm Wood Mackenzie, and the Q3 2022 edition was published on September 8.
The year 2022 has brought both challenges and opportunities for the US solar industry. Earlier this year, the US Department of Commerce initiated an investigation related to import tariff circumvention by Asian solar manufacturers. New anti-dumping and countervailing duties (AD/CVD) of up to 250% were possible, and solar developers paused many large projects due to the potential impact on costs.
However, the Biden Administration announced that no new tariffs would be applied for two years, and the Inflation Reduction Act renewed the 30% solar federal tax credit for 10 years. Considering the renewed tax credit, the SEIA increased their solar growth forecast for the 2023-2027 period by 62 GW.
Get a professional solar PV system design. Save on power bills and qualify for incentives.
Here we will discuss the main findings from the Q3 2022 Solar Market Insight. Solar power accounts for 39% of total generation capacity installed by the US during the first half of the year. 4.6 GW were installed during Q2 2022, which represents a 12% increase from Q1.
Solar PV Costs by Market Segment
The SEIA and Wood Mackenzie keep track of solar installation costs by market segment, and they provide an update in each edition of the Solar Market Insight report. The following costs per installed watt were reported as of September 2022:
|
Solar Market Segment |
Installed Price, Q2 2022 |
Installed Price, Q2 2021 |
|
Residential |
$3.25 per watt |
$2.98 per watt |
|
Commercial |
$1.71 per watt |
$1.57 per watt |
|
Utility, fixed tilt |
$0.92 per watt |
$0.85 per watt |
|
Utility, tracking |
$1.07 per watt |
$0.95 per watt |
High inflation has also been evident in the solar industry. Between Q2 2021 and Q2 2022, the installed price of PV systems was up by 9.1% in the residential sector and 8.9% in the commercial sector. In the utility-scale sector, the cost of PV arrays with solar tracking capacity was up by 12.6%, and the cost of fixed-tilt arrays increased by 8.2%.
However, electricity prices have also been rising steadily throughout the US in 2022. The latest Consumer Price Index data published in August 2022 reveals a 12-month price increase of 15.2% for electricity services. Solar PV system prices have increased, but the cost of the electricity they save has increased by an even higher percentage. Also, the newly approved extension of the 30% federal tax credit will help compensate for the recent increase in equipment costs.
Residential Solar Power Continues to Grow Fast
The residential solar market continues to break records each quarter. The SEIA reported nearly 180,000 new residential PV systems in Q2 2022, representing a total capacity of 1,358 MW. This growth is largely concentrated in three states, which account for over 50% of installations (704 MW):
- California: 459 MW
- Florida: 134 MW
- Texas: 111 MW
The import tariff investigation slowed down the US solar industry in general, but the residential sector was the least affected. Large developers are very dependent on PV module shipments from southeast Asia, but small-scale solar installers can switch to locally manufactured brands more easily when imports are being delayed.
According to the SEIA, the 30% federal tax credit will boost residential solar installations during the next five years (2023-2027) by 7.3 GW above their previous forecast.
Commercial and Community Solar Power
The commercial solar PV market is much smaller than the residential segment, with 336 MW installed in Q2 2022, up from 299 MW the previous quarter. However, the SEIA is forecasting an additional growth of 2 GW beyond their baseline during the 2023-2027 period, thanks to the Inflation Reduction Act.
Community solar power grew by 228 MW during Q2 2022. New York is the undisputed leader in this market segment, representing over 50% of new installed capacity, followed by Maine. Together, New York and Maine account for 72% of community solar capacity added by the US during the first half of 2022.
In total, the commercial and community solar market segments added 564 MW in Q2 2022, which represents 12% of PV capacity added during the quarter (4.6 GW).
Leave Comment