by Brianna Crandall — April 6, 2020 — The Solar Energy Industries Association (SEIA) released a survey mid-March showing record-breaking growth in the solar industry — and then the COVID-19 shutdowns hit. Here are some highlights of the state of the industry a month ago and now. How it will impact your energy-saving solar project depends partly on the restrictions of your locale. Industry resources for COVID-19 are provided at the end.
US Solar Market Insight 2019 Year-in-Review report
According to the US Solar Market Insight 2019 Year-in-Review report released March 17 by SEIA and Wood Mackenzie, solar accounted for 40% of all new electric generating capacity in the US in 2019, its highest share ever and more than any other source of electricity, with 13.3 gigawatts (GW) installed. Despite policy challenges and a second year of the Section 201 tariffs, the US solar market grew by 23% from 2018.
Graphic courtesy SEIA. Click to enlarge.
According to the report, total installed PV capacity in the US was projected to rise by 47% in 2020, with nearly 20 GW of new installations expected by the end of the year. Each of the next two years were expected to be the largest on record for the US solar industry.
Residential sector
The residential solar sector saw record-setting installation totals with more than 2.8 GW installed, led by a record year in California and continued growth in emerging markets. The segment saw annual growth of 15% while achieving its highest installation volumes in history.
But emerging markets also deserve credit for this year’s record-breaking installations, as Florida installed the second-most rooftop solar in the country after California, noted the report.
Austin Perea, senior analyst with Wood Mackenzie, pointed out:
With much of the residential solar market to-date driven by California and Northeast states, Florida is a window into the future of the national residential solar market given its resemblance to the vast swath of markets with no state-wide incentive programs or the high electricity prices that make rooftop solar so attractive.
Utility-scale market
Meanwhile, the utility-scale market added 8.4 GW of new capacity in 2019, more than half of which came online in the fourth quarter (Q4). The 4.4 GW of utility PV installed in the fourth quarter makes it the second-largest quarter in history for the market. A total of 30.4 GW of new utility PV projects were announced in 2019, bringing the contracted pipeline to a record high of 48.1 GW.
Non-residential sector
In 2019, non-residential PV saw an annual decline of 7%, due largely to policy reforms and interconnection delays in key states like California and Massachusetts. A shrinking pipeline of community solar projects in Minnesota also contributed to deployment declines, while community solar markets in New York, Maryland, Illinois and New Jersey are expected to grow going forward.
The emergence of Texas and Florida as top solar states, along with strong year in established markets like Arizona, Georgia and North Carolina, helped drive solid growth in 2019 across all segments.
Over the next five years, total installed US PV capacity was expected to more than double, with annual installations projected to reach 20.4 GW in 2021 prior to the expiration of the federal solar Investment Tax Credit for residential systems and a drop to 10% for commercial and utility-scale customers.
Key findings from the report include:
- Solar accounted for 40% of all new electricity generating capacity added in the US in 2019.
- In 2019, the US solar market installed 13.3 GW of solar PV, a 23% increase from 2018.
- Cumulative operating PV capacity in the US now exceeds 76 GW, up from just 1 GW at the end of 2009.
- The US saw record-setting residential solar capacity added in 2019 with more than 2.8 GW installed.
- The contracted utility PV pipeline grew to a record high of 48.1 GW in 2019.
- Community solar continues to expand its geographic diversification, with the sub-segment seeing its third consecutive year of more than 500 MW installed.
Member surveys during COVID-19 shutdowns
“As the economic crisis brought on by the COVID-19 pandemic evolves, one thing has become very clear — the solar industry is at risk,” according to a blog post by SEIA President and CEO Abigail Ross Hopper on March 26. As is the case for numerous other industries, a survey conducted over 10 days of SEIA member companies shows that “solar companies and workers are losing business and being put out of work by COVID-19.”
SEIA’s first priority is of course to protect industry workers and their families during this public health crisis. The group’s next stated priority is “creating a policy environment that gives the solar industry the tools it needs to create long-term growth.”
According to Hopper’s blog:
As of the close of our first survey on Sunday, 22% of respondents were making workforce reduction plans. These numbers are already looking like the low end: of the first 80 responses to our second survey, 40% of respondents report staffing reductions, representing a 17% reduction in their reported workforce.
More than 75% of solar companies have fewer than 50 employees. These small businesses represent the backbone of the American economy, and the concerns they’ve voiced to us are troublesome. The survey respondents were very concerned or moderately concerned about construction delays (86%), supply chain and equipment delays (84%), permitting delays (81%) and customer acquisition (81%). Any one of these issues could be a huge problem on its own, but together they compound. It’s notable that companies became significantly more concerned in all areas as the survey period of 3/13-3/22 went on.
Highlights of the survey responses include:
- Cancellation rates for residential solar systems are now extremely high, hitting upwards of 50% in some sectors. This is leading to jobless installers, which was previously America’s fastest-growing profession.
- Retail solar sales in big box stores are being curtailed or eliminated, following the termination of door-to-door sales.
- One company today told us they have already seen a 60% drop in sales.
- Companies are reporting complete work stoppage and sales lost for six months to a year.
- One company with 350 employees completely shut down this week.
- Orders for shipments are being cancelled left and right, hurting manufacturers. Companies are reporting 90- to 130-day delays for products.
- In Pennsylvania, a company laid off all of their field staff and is concerned about their ability to re-mobilize after the crisis subsides, underscoring the need for immediate relief for longer-term economic stimulus measures to be effective.
- Financing is freezing for some. More than 63% of respondents are concerned that they can’t get access to tax equity.
Hopper’s blog concluded:
All of these data points tell us a clear story: the solar industry needs policies to protect and support workers as a result of this awful virus. Nothing less than the future of our clean energy economy is at stake. We are working with Congress to find solutions to this health and economic crisis and we will keep you posted on our findings as we fight through this difficult time in America’s history.
Legislative actions
As federal, state and local governments deal with the impact of the shutdowns designed to stop the spread of COVID-19, caused by the SARS-CoV-2 novel coronavirus, provisions announced April 3 by New York State demonstrate a way forward to help the energy-saving, environmentally friendly technology to continue to be viable as the economy recovers. Although the state had just made the difficult decision to halt construction projects, thereby shutting down solar installations, legislators passed permitting reforms that will fast-track permitting approvals for large-scale solar projects, prioritizing the long-term stability and growth of the solar market.
As Hopper remarked in a solar industry statement released March 25 following the $2 trillion COVID-19 stimulus package agreed to by Congress the previous night:
We fully expect to work with Congress on any broad economic stimulus package. This will ensure that when this awful chapter in America’s history comes to an end, the clean energy economy is well positioned to lead our nation’s economic recovery.
Solar industry COVID-19 resources and updates
For more information on SEIA’s response to COVID-19 and related industry news, see the group’s Coronavirus Information & Resources page. The page includes legislative updates (such as the CARES Act); guidance on state closure orders; webinars; guidance for installers, EPCs and O&M providers; and permitting options during COVID-19.
