Solar market forges ahead in Q3 as residential installations recover and utility-scale pipeline grows

U.S. solar companies installed 3.8 gigawatts (GW) of new solar photovoltaic (PV) capacity in Q3 2020, a 9% increase from Q2 installations as the industry experienced a recovery from the worst impacts of the COVID-19 pandemic.

According to the 'U.S. Solar Market Insight Q4 2020' report, released today by Wood Mackenzie and the Solar Energy Industries Association (SEIA), solar accounts for 43% of all new electric generating capacity additions through Q3 2020, more than any other electricity source. The report projects a record 19 GW of new solar capacity installations in 2020, representing 43% year-over-year growth from 2019.

“This report points to the incredible resilience of our companies and workers in the face of the pandemic and continued demand for clean, affordable electricity sources,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association. “It also speaks to our ability to support economic growth, even in our darkest moments. While solar will continue to grow, the next administration and Congress have an opportunity to help the solar industry reach its Solar+ Decade goals, creating hundreds of thousands of jobs and tackling the climate crisis.”  

The residential solar market — which was the hardest hit by the business impacts of the pandemic — beat recovery expectations, growing 14% over Q2 but remained below Q1 levels.

“Logically, the states with the biggest installation declines in Q2 also had the biggest recoveries in Q3, such as New York and New Jersey where restrictions were substantial,” said Michelle Davis, senior analyst at Wood Mackenzie. “Business model adaptations, such as virtual sales tactics and pricing promotions, continued to pay dividends through the summer and fall.”

The utility-scale market was the primary driver of Q3 installations with 2.7 GW of new capacity, representing 70% of all solar capacity brought online in Q3.

Sun Belt states are leading the way on new capacity additions this year, with Texas and Florida both installing more than 2 GW through Q3 2020. For perspective, that is nearly the amount of solar that each of those states installed over 2018 and 2019 combined.

The utility-scale project pipeline ballooned to a record 69.2 GW, and the U.S. is now forecast to reach 100 GW of cumulative installed solar capacity by mid-2021.