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The U.S. solar industry installed a record 19.2 GWdc of photovoltaic (PV) capacity in 2020, a 43% increase from 2019, according to a report released by the Solar Energy Industries Association (SEIA) and Wood Mackenzie. The numbers are particularly impressive considering the world was dealing with unique challenges as a result of COVID-19.
“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. “The forecast shows that by 2030, the equivalent of one in eight American homes will have solar, but we still have a long way to go if we want to reach our goals in the Solar+ Decade.”
Solar accounted for 43% of all electricity-generating capacity added in the U.S. in 2020 (Figure 1), representing solar power’s largest-ever share of new generating capacity and ranking first among all technologies for the second year in a row. And the trend is likely to continue—Wood Mackenzie is forecasting that the total operating solar fleet will more than quadruple by 2030.
“The recent two-year extension of the investment tax credit (ITC) will drive greater solar adoption through 2025,” said Michelle Davis, senior analyst from Wood Mackenzie. “Compelling economics for distributed and utility-scale solar along with decarbonization commitments from numerous stakeholders will result in a landmark installation rate of over 50 GWdc by the end of the decade.”
The ITC extension, which was passed in the final days of 2020, led Wood Mackenzie to increase its 2021–2025 solar deployment forecast by 17% (Figure 2). “This report makes it clear that smart policies work,” said Hopper.
Fitch Ratings in a separate report issued on March 15 said solar projects outperformed wind projects throughout the world for the third straight year “with the global pandemic having little effect on the sector so far.” The firm reported that electricity production from solar projects “continues to exceed initial estimates with many solar projects performing so well operationally that some ratings are equivalent to those of the off-taker.” Conversely, wind projects are still largely underperforming against expectations, it said.
“The ongoing global pandemic has had a muted impact on this class of credits that are largely insulated from demand risk and have remained operationally stable,” said Andrew Joynt, senior director with Fitch Ratings. Like Wood Mackenzie, Fitch Ratings suggested the shift to renewables will continue. “Ever-growing corporate sustainability goals should continue to fuel the growth of commercial and corporate [power purchase agreements],” the firm said.
