(MENAFN- America News Hour) The United States solar energy market is expected to grow at a CAGR of 17.32%. Factors, such as solar PV projects under construction, in the pipeline and planning stages, and supportive policies of the government are expected to boost the cumulative installed capacity of solar energy during the forecast period. Like many other industries, the solar energy industry has been hit hard by COVID-19 pandemic, resulting in uncertainty for the players involved in the solar energy market. More than 72,000 solar workers are expected to lose their jobs because of the pandemic. According to the industry experts, around 30% decline is anticipated in the new solar PV capacity additions in 2020. This decline in new installations can be attributed to challenges posed by work being halted, permitting delays, and the decline in consumer demand. In addition, financing for solar projects has become a significant challenge. The economic downturn is causing tax equity markets to dry up, an important market that solar companies use to finance their projects. These challenges are expected to have a significant impact on small businesses and new entrants in the United States' solar energy industry..
– In 2019, the country's PV installations increased by 24% Y-o-Y, with the residential and utility-scale markets growing by 16% and 38%, respectively. However, the non-residential markets contracted by 4%. The United States installed 13.4 GW of PV in 2019. The Q1 2020 recorded the highest solar PV installations in history, driven by nearly 2 GW of utility-scale solar, supplemented by 1.6 GW of residential, commercial, and industrial solar PV installations.
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Key Market Trends
Solar Photovoltaic (PV) Expected to Dominate the Market
– In 2019, the United States was the second-largest PV market in terms of both cumulative and annual installations. Cumulative installed PV capacity in the country was 74.84 GW in 2019, with the utility segment accounting for the significant share (61.05%).
– California has the highest solar PV generation in the country, accounting for almost 20% in 2019, representing a 52 times increase from 0.4% in 2010. Moreover, PV solar installation in other emerging states in the country, such as Texas, Utah, and Florida, is expected to register significant growth during the forecast period, supporting the market's growth.
– In early 2018, the governor of Hawaii passed a law pledging the state to become carbon-neutral by 2045. Adding to this, Vermont, a county that has focused on increasing its commercial-scale solar PV capacity since 2011, pledged to have 90% of its consumed energy from renewable sources by 2050. Moreover, states with low installations five years ago are now driving significant demand. In 2015, Texas and Florida totaled 4% of new United States PV installations, and in 2019, representing 20% of the total solar PV installed capacity.
– The percentage of electricity generated by fossil fuels in the United States has dropped from 70% in 2010 to 62% in 2019, while renewable power generation increased from 10%–18% over the same period. Although solar PV only contributed 2.6% of power generation in 2019, it has increased by almost 43 times since 2010. Therefore, with government policies supporting the penetration of solar PV in the energy mix, it is expected to grow during the forecast period.
– The Solar Investment Tax Credits (ITC) have proved to be one of the most successful US government schemes in encouraging solar power generation. Under Solar ITC schemes, the residential, commercial, and utility solar plant owners can claim 30% of federal tax credits against solar energy property. This scheme has helped reduce the solar power generation cost in the country.
High Investment Attractiveness of the United States Solar Power Market
– Due to the COVID-19 outbreak in 2020, most of the major countries worldwide are expected to register a slowdown in solar power installation due to the following two reasons.
– The solar power investments are being postponed due to the decline in funds.
– Many of these countries, like European countries, Australia, and India, depend on imports to meet the demand for solar panels.
– In the United States, tax credits on the renewables are expected to expire in 2021. Hence, the investors in solar power are expected to rush to finish the projects during 2020 and 2021. This trend is expected to partly offset the negative impacts of the COVID-19 on the investments in the solar industry.
– The US government had imposed a 30% tax on solar panel imports. This resulted in increased competitiveness of the locally manufactured solar panels, driving the local manufacturing of solar panels. Hence, the United States is expected to be less reliant and less sensitive to the international supply chain disruption. Hence, during 2020 and 2021, solar power installations are expected to register positive growth in terms of total capacity.
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Competitive Landscape
The United States solar energy market is fragmented. Some of the key players in this market include M. A. Mortenson Company, First Solar, Inc., NextEra Energy Inc, Swinerton Renewable Energy, and 8minutenergy Renewables LLC.
1 INTRODUCTION
1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions
2 EXECUTIVE SUMMARY
3 RESEARCH METHODOLOGY
4 MARKET OVERVIEW
4.1 Introduction
4.2 United States Solar Energy Installated Capacity and Forecast in Megawatt (MW),
4.3 Recent Trends and Developments
4.4 Government Policies and Regulations
4.5 Market Dynamics
4.5.1 Drivers
4.5.2 Restraints
4.6 Supply Chain Analysis
4.7 PESTLE Analysis
5 MARKET SEGMENTATION
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