U.S. Solar Energy Market Insights Report December 2022: Key Facts and Figures

Date: 2023-04-21     hits: 934

Author: Michael Tobias

December 13, 2022

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Three states have been leading the way in solar installations during the last three years: California, Texas and Florida. The capacity additions by these states in Q1-Q3 2022 are summarized below:

• California: 3,187 MW

• Texas: 2,325 MW

• Florida: 1,578 MW

The Residential Solar Market Broke Records Again in Q3 2022

According to the SMI report, the US installed 1,568 MW of residential solar capacity during Q3 2022, breaking previous records. Home solar installations have been steadily growing in the US during the last four quarters, as you can see in the following table:

The US surpassed 1,000 MW of home solar installations in a single quarter for the first time on record in 2021. The quarterly Solar Market Insight has reported steady growth since then, and residential installations surpassed 1,500 MW for the first time on record in Q3 2022.

California installed 571 MW of home solar capacity in Q3 2022, representing over one-third of the total capacity added in this market segment. Texas was in 2nd place with 150 MW, while Florida was in 3rd place with 130 MW. Together, these three states added 851 MW of residential solar power, representing 54% of nationwide growth.

Commercial and Community Solar: Modest but Steady Growth

Compared with the residential solar market, the commercial and community market segments are smaller. The SEIA and WoodMac reported 340 MW of commercial solar capacity and 212 MW of community solar capacity in Q3 2022, reaching a combined capacity of 552 MW. Due to their scale and the number of PV modules involved, community and commercial solar projects are more vulnerable to supply chain issues.

New York is the leading state in the community solar market by far, representing 60% of the capacity added during Q3 2022. California could also become a promising market thanks to new legislation that favors community solar projects, and the SMI report is forecasting 570 MW of new installations between 2024 and 2027.

In the commercial solar market, the SMI report forecasts an average annual growth of 7% through 2027. Both commercial and community solar projects can benefit from new incentives introduced by the Inflation Reduction Act, and this will contribute to faster growth.

Utility-Scale Solar Power: Dealing with Supply Chain Issues

Large solar projects are the most affected by supply chain issues, and this is reflected in the installation volumes reported. The US installed 2,460 MW of utility-scale solar power during Q3 2022, and cumulative installations for the year (Q1-Q3 2022) are at 7.4 GW, which is 33% less compared with 2021.

Supply chain issues have been the main cause of project delays in 2022. Solar developers faced the Withhold Release Order (WRO) last year, the possibility of new anti-dumping and countervailing duties (AD/CVD) earlier in 2022, and now the Uyghur Forced Labor Prevention Act (UFLPA) in the second half of 2022.

• The US Department of Commerce is detaining solar panel shipments under the UFLPA, and developers must submit documentation proving there is no forced labor involved.

• Quartzite sourcing documentation is especially difficult to obtain, and many utility-scale solar projects are paused due to withheld shipments.

In spite of current hardships, the SEIA and WoodMac are expecting a much better outlook for utility-scale solar projects during the next five years. A faster installation rate is expected as supply chain issues are solved, and the Inflation Reduction Act takes effect. The SMI report is forecasting a project pipeline of 150 GW by 2027, and annual installation could reach 30-40 GW.