In Q1 2024, the US solar market installed 11.8 GW of capacity, a record first quarter for the industry. It was the industry’s second-largest quarter of installations in history, second only to the previous quarter, Q4 2023. Unicorn Solar believes much of this relates to all the modules held in customs to review the traceability of the materials.
· Solar accounted for 75% of all new electricity-generating capacity added to the US grid in the first quarter of 2024.
· Domestic future module manufacturing capacity increased to 26.6 GW in Q1 2024 compared to 15.6 GW in Q4 2023. Once this capacity fully ramps up, it will be sufficient to supply about 70% of domestic demand.
· Florida installed the most solar in the first quarter of the year with 2.7 GW, Texas as a close second with 2.6 GW. For both states, most of these installations were utility-scale.
· The residential segment had its lowest quarter since Q1 2022 at 1.3 GW, reflecting a 25% decline year-over-year and 18% quarter-over-quarter. While slowdowns are occurring nationwide, these declines were heavily influenced by California, where quarterly installations have shrunk for the last two quarters as NEM 2.0 projects are built out and the state transitions to the net billing tariff. Unicorn Solar says that the NEM 3 has caused even great losses in the residential market. Robert Benedict in his personal experience with PG&E says their bill has increased substantially even though they have solar and storage. It is time for the CEC to place price controls on the utilities.
· The commercial solar segment installed 434 MW in Q1 2024, roughly equal to Q1 2023, and a 38% decline from Q4 2023. The commercial solar market is diversifying – newer, smaller markets are growing while mature ones are shrinking.
· The community solar segment installed 279 MW in Q1 2024, also equal to the same quarter last year, and a 32% decline from Q4 2023. This industry segment awaits enabling policy to expand into new state markets.
· The utility-scale segment continues to have record-breaking quarterly installation volumes, with 9.8 GW installed in Q1 2024. This was the largest first quarter ever for utility-scale deployment, more than double the volume of any previous first quarter. Capacity additions in Florida, Texas, California, and Nevada contributed heavily to the strong quarter. Projects that have faced various delays are coming online.
· Over the last few months, the solar industry has been contending with numerous policy changes, including tariffs on imports of solar cells and modules. In this report, we’ve accounted for the updates to the Section 201 tariffs, notably the removal of the bifacial module exemption. And while the Section 301 tariffs were doubled from 25% to 50% for Chinese solar cells and modules, the tariff increase will not have a significant direct impact on the US solar industry, given the low volume less than 0.1% of Chinese imports.
· This report does not yet incorporate the impacts of potential new antidumping and countervailing duties AD/CVD on imports of crystalline silicon cells and modules from four Southeast Asia countries. It is still early days for these cases, with the timeline and tariff levels for any potential new tariffs still highly uncertain. But it’s important to note that there is sufficient cell and module production capacity outside the target countries to serve the US market, along with domestic production and thin film production. Also, other than the four tariff restricted countries there are four new countries manufacturing modules Southeast Asia for the US. They are Indonesia, Laos, Myanmar, and India.
· Our latest five-year outlooks show the US solar industry will consistently install around 40 GW a year for the next five years. In 2024 and 2025, growth will be flat, driven mostly by a slowdown in growth for utility-scale solar. Lack of labor availability, high voltage equipment constraints, and continued trade policy uncertainty impede continued growth. From 2026-2029, annual growth will average single digits as the various segments balance each other out. In this timeframe, residential solar will grow by 9% and commercial solar will grow by 11% on average. By contrast, community solar will shrink by 8% and utility-scale solar will only grow by 3% on average.
· Note all the wattages are in DC.
Reprinted from SEIAs report and edited by Robert Benedict
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