U.S. PV installed capacity is expected to increase to 336GW by 2027
According to a survey report jointly released by the American Photovoltaic Industry Association and research organization Wood Mackenzie, it is expected that by 2027, the installed capacity of photovoltaic systems installed in the United States will increase from the current 129GW to 336GW.
Despite this rapid growth, the report’s forecast for PV systems installed in the US in 2022 has been revised down to 15.7GW due to the adverse impact of the US Department of Commerce’s anti-dumping investigation of major international PV module suppliers. Ongoing international trade and labor issues, including the Forced Labor Prevention Act, are likely to continue to impact PV module supply in 2023, and will impact the deployment of PV systems. The report claims that the benefits of the Reducing Inflation Act may not materialize in PV deployments until 2024 at the earliest.
Photovoltaic systems accounted for 39% of all new energy capacity additions in the U.S. in the first half of 2022, and photovoltaics currently account for about 4.5% of total U.S. power generation. Perhaps the most important element of the Reducing Inflation Act for the PV industry is the extension of the 30% Investment Tax Credit (ITC).
Michelle Davis, principal analyst at Wood Mackenzie and lead author of the report, said: “The Reducing Inflation Act provides unprecedented long-term certainty for the U.S. PV industry. Providing a ten-year investment tax credit is comparable to the industry’s The one, two or five-year deferment experienced is in stark contrast. It is no exaggeration to say that the Investment Tax Credit (ITC) will usher in a new era for the U.S. PV industry.”
U.S. residential PV installed capacity has grown for the fifth consecutive quarter, reaching a record 1.36GW in the second quarter of this year, up 37% from the second quarter of 2021. This means that residential PV systems were installed for nearly 180,000 households during the quarter. The report claims that strong customer demand is partly due to power outages and rising electricity prices. Residential PV systems installed in 2023 may decline slightly as California’s NEM 3.0 policy goes into effect.
The U.S. installed 336MW of commercial PV systems in the second quarter, down 7% year over year; while installed utility-scale PV systems was 2.7GW, down 25% from the second quarter of 2021. Wood Mackenzie said the passage of the Reducing Inflation Act increased its forecast for the U.S. PV market to install PV systems over the next five years by 52GW, a 47% increase.
Compared with previous forecasts, the installed capacity of community PV projects in the United States will increase by 18%. The executive order signed by U.S. President Joe Biden brought some relief to the supply shortage in the U.S. PV industry, but most of the new PV system additions came from Maine and New York. These two states accounted for 72% of the new installed capacity of community PV systems in the United States in the first half of 2022. In Maine, Net Energy Billing (NEB) PV projects not included in the state’s interconnection plan are rapidly coming online. And in New York State, the Community Adder PV project continues to come online and will continue to scale.
Installation prices in the U.S. PV segment continued to climb in the second quarter, largely due to higher prices for PV modules. Residential PV system prices rose 9% year over year, commercial PV systems rose 8%, utility-scale fixed-tilt PV systems rose 8%, and utility-scale tracking PV systems rose 13%.