China, the United States, and India Added 8.7 GW of Solar Capacity in Q1 2020
The United States saw the strongest first quarter ever in terms of installations
The United States installed 3.6 GW of new solar capacity in the first quarter (Q1) of 2020, according to the latest report published by the Solar energy Industries Association (SEIA) and Wood Mackenzie. This is the largest Q1 number in terms of installations for the country, demonstrating a 42% increase year-over-year (YoY).
As per the report, the COVID-19 pandemic is having a big impact on the U.S. solar industry. Constructions have been delayed, and the customer demand has also dropped because of the pandemic.
For Q1 2020, China led the way with total installations of 4 GW, followed closely by the United States with 3.6 GW of installations. India added a total of only 1.1 GW of new installations in this period. The big three in the solar arena collectively added ~8.7 GW of solar capacity in Q1 2020.
While the numbers for the solar installations in the U.S. are better than the 2.7 GW during the same period last year, China saw a decline from 5.2 GW in Q1 2019 to 4 GW in Q1 2020.
India installed 1.1 GW of solar capacity in the first quarter (Q1) of 2020, a 43% decline quarter-over-quarter (QoQ), compared to 1.89 GW installed in Q4 2019. The solar capacity addition in India in Q1 2020 was the lowest since Q4 2016. In comparison, solar installations were down by 39% YoY compared to 1,761 MW added in Q1 2019.
Compared to Q4 2019, all three countries witnessed a decline in numbers, and this can be mainly attributed to the ongoing COVID-19 pandemic.
Speaking on the impact of the COVID-19 pandemic, Abigail Ross Hopper, President, and CEO of SEIA, said, “The solar industry has certainly been affected by the pandemic, resulting in uncertainty for businesses and 72,000 Americans out of job. Our industry remains one of the fastest-growing industries in the country, and with simple policy action now, we are ready to lead our economic recovery and provide new hope for out of work Americans in the second half of the year.”
According to the report, solar accounted for 40% of the total new electricity generating capacity added in the U.S. in Q1 2020 (solar accounted for 65% of all power capacity added in Q1 2020). While the first quarter remained largely unaffected by the COVID-19 pandemic, the impact is now being felt in the second quarter.
In addition to the 3.6 GW of new installations, 5.4 GW of new solar projects were announced in Q1 2020. The distributed solar segment has been the worst hit by the pandemic, and it has seen a drop of 31% of installations in 2020 than in 2019.
The report notes that the first quarter witnessed a strong showing by the non-residential sector, but the near-term impact of the pandemic will result in a 38% decline from the 2019 volumes. The non-residential solar segment saw an 8% increase over Q1 2019 and a 29% decrease from Q4 2019. But the point remains that the coronavirus crisis has been a major impediment in both the ongoing projects and commercial project development.
This year was expected to be the boom year for the residential solar sector before the outbreak of the pandemic, with 810 MW installed in Q1 2020. California and North East continue to lead the way in the residential solar market, and they have been maintaining a stable installation volume on a quarter-over-quarter basis. But in Q1 2020, other markets also contributed significantly to the overall growth of the segment. The report predicts that there will be a 25% decline in 2020 residential volumes as compared to 2019, and then there will be an increase of 26% in 2021, as the market will recover from the COVID-19 pandemic.
The utility-scale solar installations saw its strongest Q1 in history, with 2.3 GW of new installations. According to the report, the virus does pose a risk to the medium and long-term forecast. In Q1 2020, the procurement remained strong, with 4.9 GW of new projects announced. Most of these projects are targeting 2021 and 2022 as their commercial operationalization date (COD). The report forecasts 15.2 GW and 13.3 GW of new installations in 2021 and 2022, respectively. The report notes that the demand for the utility will remain strong, averaging 13.3 GW annually from 2022 to 2025. The utility segment aims to add 14.4 GW of new capacity this year. The report further notes that 80 GW of utility-scale solar projects will be developed during the 2020-2025 period.
The report further states that the system pricing fell across all market segments. System pricing fell QoQ by 0.4%, 1.42%, 1.5%, and 0.4% in the residential, non-residential, utility fixed-tilt, and Utility single-axis tracking markets respectively.
The pandemic affected the global PV supply chain also in Q1 2020, causing a lower production level in China and Southeast Asia. While polysilicon prices declined by 3.5% in Q1 2020, multi-wafer prices declined by 17%. Polysilicon and mono wafers saw a decline of 1% each in Q1 2020.
The top three solar markets in the world – China, U.S., and India, added nearly 51 GW of solar capacity in 2019. China led the way with 30.1 GW, followed by the U.S. at 13.3 GW, and India maintained its third position with installations totaling 7.3 GW for the year 2019.