ORIGINAL REPORTING: Solar Boom Chronicled
Solar on track to break growth records, but analysts say market challenges loom; An expected module glut could give way to even lower installed solar prices as the market corrects
Herman K. Trabish, June 30, 2016 (Utility Dive)
Editor’s Note: The most recent numbers confirm both this piece’s forecasts.
Solar growth and system price declines in the first quarter of 2016 foretold the year’s record-breaking growth, as just reported by the Solar Energy Industries Association (SEIA) and GTM Research. Q1 saw 1,665 MW of solar PV nationwide and that led to the year’s enormous build, far out-reaching 2015’s 7.5 GW build. The 2016 boom was led by the utility-scale PV expansion, which was already bigger than 2015’s entire installed capacity in Q3. The price of non-residential solar installations dropped 8.3% in 1H 2016 to $1.88/watt, putting in on track to reach the U.S. Department of Energy’s “impossible dream” price target of $1.00/watt by 2020. Residential installations dropped 8.8%, to $3.00/watt.
For the first time, solar became the leading source of new electric generation in 2016 and was projected to be over a third of new capacity. The extension of the federal investment tax credit [ITC] was the most important policy development for U.S. solar in 2016 and in the last decade. It led to a huge pipeline of late-stage utility PV projects that were rushed through development in 2015, to be ready if the ITC was not extended. Utility-scale solar nearly 75% of the new capacity in Q1. Solar prices have dropped so low in some regions that it can compete with and complement new natural gas generation. The ITC extension is expected to serve as a long-term policy bridge and help transform solar PV into an increasingly mainstream source of U.S. power generation…click here for more