Even given the challenges of Trump and COVID-19, the USA managed to install a record 19.2 gigawatts (DC) of solar power capacity in 2020, up 43% on 2019.
A report released by the Solar Energy Industries Association (SEIA) and Wood Mackenzie says solar power led all technologies in new electric-generating capacity added in the US, accounting for 43% last year. 8 GWdc of new installations in the final quarter of last year represented the biggest quarter for solar installs in the country’s history.
In terms of utility scale solar, just under 14GWdc was installed over the year, with 6.3 GWdc occurring in Q4 2020.
“After a slowdown in Q2 due to the pandemic, the solar industry innovated and came roaring back to continue our trajectory as America’s leading source of new energy,” said SEIA president and CEO Abigail Ross Hopper.
In terms of new COVID-19 infections and deaths, it was the second half of the year when both went through the roof – but what Ms. Hopper is referring to are restrictions on activity; the easing of which came at a very high cost.
A Big Year For Home Solar Power
The report notes residential solar capacity was up 11% from 2019, reaching a record 3.1 GW. However, this was lower than the 18% annual growth in 2019 due to the impacts of the pandemic in the first half of 2020.
Pent-up demand from the second quarter combined with a surge in home improvements interest translated to record-setting sales pipelines in the second half 2020.
3.1 GW is pretty impressive, but Australia managed around the same level of small-scale installations in 2020 (although this includes small commercial solar too) – and the U.S population is close to thirteen times that of Australia’s.
So, what is holding back home owners from installing solar panels in the USA?
Primarily, cost.
Currently, the average cost of a fully installed 6kW solar power system in the USA is around USD $12,500 after tax credits, which works out to be approximately AUD $16,000 at current exchange rates.
The cost of solar in Australia is far lower, with a good quality 6.6kW solar system generally costing between $5,000 – $9,000 depending on the components and solar installer used. As mentioned on Monday, while there has been increasing pressure on solar prices due to materials and production issues, to this point Australia has been protected by its strengthening dollar.
USA Solar Energy Outlook
While a recent two-year extension of the investment tax credit (ITC) will drive solar uptake over the next couple of years, Wood Mackenzie says the economics of distributed and utility-scale solar generally along with commitments to decarbonisation will result in more than 50GWdc capacity to be added in 2030.
For residential solar growth specifically, Wood Mackenzie is tipping a dip in 2024 before a steady march upwards resumes.
Overall, Wood Mackenzie expects a cumulative 324 GWdc of solar capacity additions in the USA over the next decade.
More from the U.S. Solar Market Insight 2020 Year-in-Review report can be viewed here.
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