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Solar panels in Eagle Rock, Calif., USA. [Image: Jeremy Levine]

A study released this week by the U.S.-based communications firm Greentech Media and the Solar Energy Industries Association (SEIA), an American advocacy group, reports that the U.S. solar market had a record-breaking 2016, with solar becoming the year’s top source of new electric generating capacity. In addition, the study forecasts that the total U.S. solar market is likely to triple its gains in the next five years—even with an expected minor dip in 2017.

Solar rising

The report, titled, U.S. Solar Market Insight: 2016 Year-in-Review, notes that the 2016 showing nearly doubled the U.S. solar market’s previous record. The growth stemmed largely from a surge in utility-scale solar projects and a nearly 20 percent year-to-year decline in the pricing of solar photovoltaic (PV) systems in the United States. And, for the first time ever, the market added more electric-generating capacity than any other energy source.

The United States as a whole saw 14,762 megawatts (direct current) of solar PV installed in 2016, in more than 370,000 individual installations—nearly twice the capacity installed during 2015. Some 22 states installed more than 100 megawatts of solar in 2016, compared with only two states in 2010. Even states that have been comparatively inactive in solar installations in previous years, such as Georgia, Minnesota, South Carolina and Utah, saw notable growth.

Utility segment powers market growth

Largely driving the impressive 2016 gains was the utility-scale PV segment, which installed more solar alone in 2016 than the entire market did in 2015. Yet the SEIA/Greentech report suggests that last year’s unmatched number of utility-scale projects will likely mean a 10 percent decline in new installations during 2017, as the market digests this new capacity. The report’s authors project that the utility-scale segment will rebound by 2019.

Additionally, the report forecasts that 13.2 gigawatts (direct current) of new PV installations will come on-line in 2017, with utility PV anticipated to account for 66 percent of the new capacity.

Residential and community segment also changing

At 19 percent, residential PV saw its growth slow in 2016. The residential segment had seen record gains in 2015, in part due to the emergence of several new state markets. Still, 2017 looks promising for the market, with expected growth of 9 percent. The contribution of one state in particular, California—which has historically accounted for nearly half of the U.S. residential market—is expected to decline in 2017, but the SEIA/Greentech report envisions year-over-year growth for 36 other states.

The nonresidential market is expected to grow 11 percent in 2017, with installation of a record 1,756 megawatts of solar power. The community solar market nearly quadrupled from 2015 to 2016 due to major installations in Minnesota and Massachusetts, and community solar is anticipated to represent 30 percent of the nonresidential market in 2018.

Looking ahead

By 2019, the U.S. solar market—which currently employs 260,000 people across the country—could resume year-over-year growth across all market segments, according to the SEIA/Greentech study. And by 2022, some 24 states will be home to more than a gigawatt of operating solar PV, up from nine today. Moreover, total installed U.S. solar PV capacity is expected to nearly triple over the next five years, and by 2022, more than 18 gigawatts of solar PV capacity will be installed annually.