Pandemic Creating ‘Crisis’ for Solar Industry
The president of the Solar Energy Industries Association on March 17 said the solar industry is seeing “a pretty significant crisis” along with the overall economy due to the global coronavirus pandemic, as the situation likely will limit growth in the solar sector this year.
Abigail Ross Hopper, president and CEO of the SEIA, told Reuters “It’s really across the board a pretty significant crisis in the solar industry in addition to a significant crisis in the overall economy,” although the SEIA in a report published Tuesday said it’s too soon to assess the COVID-19 outbreak’s eventual impact on the solar sector.
Hopper noted it’s likely the trade group will reduce its annual market report’s projection of 47% growth in the industry in 2020. The SEIA’s “U.S. Solar Market Insight 2019 Year-in-Review” report, released in conjunction with Wood Mackenzie, said solar accounted for 40% of all new electric generating capacity in the U.S. in 2019, its highest share ever, and was responsible for more new power generation capacity than any other source of electricity, with 13.3 GW installed.
Natural gas accounted for about 32% of the nation’s new generation capacity in 2019, with wind installations responsible for about 27%, according to the report.
23% Growth Year-Over-Year
The SEIA said that the U.S. solar market grew by 23% year-over-year in 2019 compared to 2018, despite government policies that weighed on the industry, including a second year of Section 201 tariffs from the Trump administration that increased the cost of imported solar cells and modules. Utility-scale installations accounted for about two-thirds of that year-over-year growth.
“Even as tariffs have slowed our growth, we’ve always said that the solar industry is resilient, and this report demonstrates that,” said Hopper in a statement. “We know anecdotally that the COVID-19 pandemic is affecting delivery schedules and our ability to meet project completion deadlines based partly on new labor shortages. This once again is testing our industry’s resilience, but we believe, over the long run, we are well positioned to outcompete incumbent generators in the Solar+ Decade and to continue growing our market share.”
The coronavirus presents challenges to solar companies as it disrupts supply chains for components, including panels and inverters, and also as it brings a shortage of labor, as Hopper noted. She said homeowners also are likely to put investments in rooftop solar on hold due to economic uncertainty. The U.S. currently has about 10 GW of utility-scale projects under construction, including several community solar projects in states such as Florida, which also installed the second-most rooftop solar in the country last year after California.
“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 statewide incentive programs or the high electricity prices that make rooftop solar so attractive,” said Austin Perea, Senior Analyst with Wood Mackenzie, in a statement.
The report published Tuesday said the residential solar market installed 2.8 GW of generation capacity, its most ever in a single year. Much of that increase came from demand in California, where state regulations requiring solar on new construction—and residents seeking their own power solutions after planned power outages during wildfire season left hundreds of thousands without electricity—drove solar adoption.
—Darrell Proctor is associate editor for POWER (@DarrellProctor1, @POWERmagazine).