The solar market is on track to break growth records this year, but analysts say the numbers may paper over some emerging market challenges for installers.
A joint report from GTM Research and the Solar Energy Industries Association (SEIA) said the solar industry is projected to add 14.5 GW of capacity this year, a 94% increase over the 7.5 GW installed in 2015. In the first quarter alone, solar developers installed 1,665 MW of solar PV nationwide, adding more new capacity than coal, natural gas and nuclear combined.
Typically, first quarter growth is the weakest of the year, but it appears the growth is building off momentum from 2015, largely due to declining system prices and an 11th-hour extension of the investment tax credit for solar installations.
Price declines for solar systems were about as impressive as installation growth last year, according to another GTM report: The price of non-residential solar installations dropped 8.3% to $1.88/watt in the first half of 2016. Residential installations dropped 8.8%, to $3.00/watt.
If continued, these drops in prices could help the solar sector hit the U.S. Department of Energy’s “impossible dream” price target of $1.00/watt by 2020, GTM noted.