From solar installations, there is now 100 GW of installed solar capacity in the U.S., the Solar Energy Industries Association (SEIA) and Wood Mackenzie have reported. The U.S. Solar Market Insight Q2 2021 report revealed that, while solar accounted for 58% of all new electric capacity in the nation in Q1, the industry has doubled in size over the last three and a half years. Plus, a majority of all renewable electric capacity added in Q1 was solar.
The Solar Market Insight report also noted that the U.S. installed 5 gigawatts (GW) of solar PV capacity in the first quarter. With the total installed capacity, 18.6 million American homes can now be powered. About 160 GW of additional capacity is planned to be added over the next 5 years, representing an expanding demand for renewable energy as photovoltaic technologies continue to be improved upon.
How It All Breaks Down
The new solar capacity represents a 46% increase in Q1 2021 over Q1 2020, with utilities leading the way in installations. In total, utility installations accounted for 3.6 GW of new solar capacity. However, residential solar sales have been robust as well. In the residential sector, 905 megawatts (MW) were added; over last year, an 11% increase.
A 19% year-over-year growth rate in the commercial sector was also reported. But solar faced a 15% decline in the community solar sector. Several states led the way in new solar capacity in Q1. The top three states are
- Texas, with 1.52 GW of new capacity installed.
- California, with 563 MW installed 563 MW
- Florida, with 525 MW
Other states in the top 10 included Indiana, Virginia, Michigan, and Iowa.
But the U.S. isn’t the only one reaching key milestones in solar capacity. The European Union had over 137 GW of capacity by the end of 2020, according to SolarPower Europe.
The Impact of Rising Solar Installation Costs
While the demand for solar power is growing, rising costs are contributing to the dynamics as well. From Q4 2020 to Q1 2021, average solar system prices were stable. However, installers are beginning to feel the effect of supply shortages. Materials such as steel, aluminum, copper, and other metals; semiconductor chips; and polysilicon are in short supply and affecting production.
The Solar Investment Tax Credit (ITC)
The ITC is expected to continue to influence solar purchasing decisions over the next three years and possibly drive record growth. By the end of 2026, forecasts by Wood Mackenzie show that there could be over 250 GW of installed photovoltaic solar capacity in the U.S.1 The drive towards solar is not slowing down, with a continued move away from fossil fuels. Doing so is still a challenge. Natural gas, with a 40.3% share in utility-scale electricity generation, and coal, with a 19.3% share, still dominate the market (these figures according to the U.S. Energy Information Administration).3
Be a Part of the Solar Movement
Investing in solar can be a challenge, but so is dealing with high monthly electric bills. At Sunworks USA, we can manage all your solar needs, including design, procurement, permitting, construction, operation, and maintenance. We have extensive experience in residential, commercial, and agricultural markets. To get started on a custom solar solution for you, get a free solar quote by calling us at 866-600-6800 today.