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U.S. solar installations hit a record high in 2020 as favorable economics, supportive policies and strong demand offset the effects of the coronavirus pandemic in the second half of the year.
Installations grew 43% year over year in 2020, reaching a record 19.2 gigawatts of new capacity, according to a report released Tuesday from the Solar Energy Industries Association and Wood Mackenize.
In the fourth quarter alone, the US added just over 8 gigawatts of capacity – a new quarterly record. To put the number in context: in 2015 as a whole, 7.5 gigawatts were added. A gigawatt is enough to power approximately 190,000 households. The US currently has 97.2 GW of total solar capacity installed, enough to power approximately 17.7 million homes.
California, Texas and Florida were the top three states for annual solar additions for the second year in a row. Virginia and North Carolina completed the top five.
Following a slowdown in the second quarter as pandemic ground operations came to a halt, residential solar saw a record-breaking sales pipeline in the second half of the year, boosted by customers interested in home improvements. The report’s authors believe this momentum is likely to continue in the second half of the year into 2021.
In the field of solar energy for utilities, the annual capacity increase has increased by 65% compared to the previous year.
“The recent two-year investment credit (ITC) extension will lead to greater adoption of solar power through 2025,” said Wood Mackenzie senior analyst Michelle Davis, referring to the tax cuts extended in December as part of the coronavirus relief and the government. spending package.
According to the report, the two-year extension of the credit at the current level will lead to a 17% increase in projections for solar deployment between 2021 and 2025.
In the US, solar power accounted for 43% of all new electricity generation capacity added in 2020, the largest ever share of new generation capacity. In many places, solar energy is now the cheapest form of new electricity.
“Residential solar sales continue to exceed expectations as lenders roll out compelling products, show interest in home improvement spikes and customers facing power outages due to extreme weather conditions seek energy resilience,” the report said.
For the first time, the SEIA and Wood Mackenzie report also looked at growth forecasts through 2030, predicting that the U.S. solar market will quadruple its size from current levels by the end of the decade.
Growth is expected to be spread across markets as customers, utilities, states and businesses are all striving to decarbonise the network. President Joe Biden called for a zero-emission energy sector by 2035 as part of his $ 2 trillion in infrastructure and climate package unveiled last July.
“A compelling economy for distributed solar and utility-scale solar, along with numerous stakeholders’ commitments to decarbonise, will result in breakthrough installation speed of more than 50 GWdc by the end of the decade,” added Davis from Wood Mackenzie.