trending Market Intelligence /marketintelligence/en/news-insights/trending/HtNHMM6CGM9-VcCkAo4cbA2 content esgSubNav
In This List

GTM: US poised to overtake Japan as world's No. 2 solar market

Blog

Insight Weekly: Global stock performance; hydrogen pilot projects; Powell's Fed future unsure

Blog

Insight Weekly Labor market recovery hurdles power market integration nonbank MA hunt

Blog

Q&A: Q2'21 Power Forecast: Overheated Power Markets are Here – Who Wins, Who Loses, and Why?

Blog

ESG & Technology: Impacts and Implications


GTM: US poised to overtake Japan as world's No. 2 solar market

TheU.S. is poised to overtake Japan this year as the world's second-largest solarmarket behind China, according to GTM Research, with developers expected tomore than double 2015 installations.

Developersare forecast to install about 16,000 MW of new solar photovoltaic capacity inthe U.S. in 2016, up more than 119% from last year. The expected jump is a result of companiesamassing huge project pipelines in anticipation of the 30% federal investmenttax credit expiring at the end of this year.

Congressultimately extended the tax break for five years, and some companies havetalked about pushingprojects out beyond 2016, in part to take advantage of expected cost declines.But there is a limit to how many projects could be delayed, GTM Research seniorsolar analyst Cory Honeyman said.

Honeymanexpects a "reset" in 2017, with installations falling to about 10,000MW, though he said that number could increase depending on the actionsdevelopers take this year.

GTMResearch believes the U.S. will remain the second-biggest solar market through2020, with India overtaking Japan for the number three spot in 2018.

Industrygrowth is expected to be helped by declining costs. GTM Research expects moduleprices to fall by 4% this year to 55 cents per watt, with price declinescontinuing at a 5% annualized rate to 44 cents per watt by the end of 2020.

However,the residential sector, in particular, faces uncertainty at the state level assome utilities push for changes to net energy metering, a policy that hashelped drive development by allowing solar customers to sell unused power backto the grid, often at retail rates.

Underscoringthe importance of net metering to rooftop solar companies, and said they were pulling outof Nevada in January after the state Public Utilities Commission cut the valueof solar credits and increased charges on customers who generate their ownpower. Regulators determined Nevada's net metering policy was acting as asubsidy for solar customers that shifted costs onto other ratepayers.

"Thereare certain businesses and customers that solar is a good fit for. When youlook at [MGM ResortsInternational], who putsolar on the roof of their convention center and can avoid demand charges andcan use power in the middle of the day, it's a brilliant application,"Nevada Public Utilities Commission Chairman Paul Thomsen said in a recentinterview with Fortune magazine. "Buta huge part of the growth potential for Sunrun and SolarCity is that person whois not home during the day, and their home is not consuming power during theday," Thomsen said in the interview. "Normally it would never makesense, because why would I want to put a generator on my roof, and producepower when I don't need it unless I have net metering."

SolarCityand Sunrun did not immediately respond to requests for comment.