(Reuters) - U.S. solar installations rose 8 percent in the second quarter as robust utility demand offset a sharp pullback in residential rooftop systems, according to an industry report published on Monday.
The industry installed 2.39 gigawatts of photovoltaic solar, up from 2.2 GW a year ago, the report by GTM Research and the Solar Energy Industries Association said. Utility projects accounted for 58 percent of the total.
The quarter’s growth is expected to be short lived, as the market is forecast to decline 17 percent for the year, reflecting weaker residential demand and lower utility procurement compared with 2016, when a federal tax credit had been slated to expire. Utilities are in the process of rebuilding their pipelines following the extension of that credit, and market growth is expected to resume in 2019.
Most new projects for utilities were procured voluntarily rather than because of a need to satisfy government mandates, reflecting the low cost of solar. Voluntary procurement is biggest in the Southeast, though solar is growing most rapidly in the Midwest as utilities see it as a complement to wind farms.
The non-residential market soared 31 percent to 437 megawatts, boosted by development of community solar projects in Minnesota and Massachusetts and corporate and industrial demand in California. Community solar plants provide power to more than one customer but are far smaller than utility-scale plants. In both Massachusetts and California, developers rushed to complete projects under solar incentive programs.
Residential solar fell 17 percent from last year as big markets in the Northeast weakened. Major national installers like Tesla Inc’s SolarCity have slowed growth dramatically to focus on the most profitable projects, leading to a sharp drop in demand in established state markets, GTM said. Installation volumes fell between 15 percent and 60 percent in Massachusetts, New York and Maryland. The California market, the nation’s largest, has slowed for several quarters.
System prices declined only modestly during the quarter as developers, fearing new tariffs on solar imports, rushed to secure panels supplies. The U.S. International Trade Commission this month will rule on a trade petition by bankrupt solar manufacturer Suniva that is seeking tariffs on overseas panels.
Solar module prices rose to 39 cents per watt during the quarter from 37 cents per watt in the first quarter. It was the first time U.S. module prices increased since 2014.
Reporting by Nichola Groom; Editing by Andrew Hay