Utility-scale solar installations in the United States dropped by 31% to 11.8 GW in 2022 compared to 2021 owing to uncertainties from the anti-circumvention probe and detainments of solar equipment caused by U.S. Customs and Border Protection’s Withhold Release Order.

While installations were lowest for the utility-scale segment since 2018, the U.S. installed 20.2 GW of solar photovoltaic capacity in 2022, down 16% from 2021, taking the total installed solar capacity to date to 142.3 GW , according to the U.S. Solar Market Insight Report 2022 released jointly by the Solar Energy Industries Association (SEIA) and Wood Mackenzie.

Despite low installations, solar photovoltaics still accounted for 50% of all new electricity-generating capacity additions in 2022, making solar the top technology for the fourth consecutive .

Figure 1 Source: SEIA/Wood Mackenzie Solar Market Insight Report 2022

During the fourth quarter of 2022, the increases in capital expenditure for the utility segment were partially offset by the adoption of large format modules.

Residential solar

In contrast to other segments, the residential solar segment grew 40% over 2021 with 6 GW of total installations as 6% of single-family owner-occupied homes opted for solar in 2022.

Figure 2 Source: SEIA/Wood Mackenzie Solar Market Insight Report 2022

Also, around half the segment was not affected by trade-related issues as much of the installation requirements for the residential segment were met with domestically-sourced modules.

The system pricing for residential segment increased by 7% and grew by 2% for the commercial segment compared to the same quarter in 2021.

Tariffs a hurdle

The report highlights that owing to the expected long-term policy certainty created by the Inflation Reduction Act (IRA), America’s cumulative installed solar capacity would increase by 80% to 700 GW by 2033.

SEIA president and CEO Abigail Ross Hopper says, “While the solar and storage industry acts swiftly on supply chains and building a stronger domestic manufacturing base, ongoing threats of steep tariffs are holding back the potential of the historic Inflation Reduction Act.”

Over 4.5 GW of solar projects contracted during the fourth quarter gained momentum from the IRA-created certainty, taking the project pipeline to 90.3 GW representing a 12% growth over the 2021 pipeline.

The report projects that the new anticircumvention tariffs which are likely to come into effect by June 2024, will mount immense pressure on the solar sector players who continue procuring non-tariffed supply.

The new tariffs could apply to some suppliers shipping cells and modules from the four Southeast Asian nations named in the probe. However, these are the countries meeting most of the U.S. PV module requirements currently.

In June 2022, President Joe Biden announced a 24-month duty exemption on solar modules and cells imported from Cambodia, Malaysia, Thailand, and Vietnam to ensure that the domestic solar industry has access to a sufficient supply of the components.

In the base case, the U.S. is expected to add over 570 GW of new solar capacity in the next decade, bringing installed solar capacity from 141 GW today to over 700 GW in 2033. The total difference between the high- and low-case outcomes amounts to 40 GW of new solar deployment in the next five years.

“While 2022 was a tough year for the solar industry, we do expect some of the supply chain issues to ease, propelling 2023 growth to 41%,” said Michelle Davis, principal analyst at Wood Mackenzie and lead author of the report.

Nearly 12.5 GW of new utility-scale solar capacity came online in the U.S. in 2021, taking the cumulative capacity to 51.34 GW across 1,131 projects.

Solar installations in the U.S. dropped 17% year-over-year in the third quarter of 2022 to 4.6 GW.