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U.S. Solar Industry Sees Phenomenal Growth

The U.S. solar market continued its years-long expansion in the second quarter of 2017 as the industry installed 2,387 megawatts (MW) of solar photovoltaics (PV), the largest total in a second quarter to date. This tops Q1's total and represents an 8 percent year-over-year gain, GTM Research and the Solar Energy Industries Association (SEIA) said in the latest U.S. Solar Market Insight Report.

"This report shows once again that solar is on the rise and will continue to add to its share of electricity generation," said Abigail Ross Hopper, SEIA's president and CEO. "Last year, solar companies added jobs 17 times faster than the rest of the economy and increased our GDP by billions of dollars. We are going to continue to fight for policies that allow the industry to continue this phenomenal growth."

All three U.S. solar market segments—commercial, residential and utility-scale—experienced quarter-over-quarter growth in Q2. The U.S. installed 2,044 MW of capacity in Q1. The non-residential and utility-scale market segments also posted year-over-year growth.

FIGURE: U.S. Quarterly PV Installations Q1 2012-Q2 2017

GTM Research / SEIA U.S. Solar Market Insight Report, Q3 2017

The non-residential market grew a robust 31 percent year-over-year, with 437 MW installed. That was driven in large part by favorable time-of-use rates in California, expiring incentives in Massachusetts, and a record-breaking quarter in New York, where a number of remote, net metered projects were completed.

Joining those states in the top 10 for additions in Q2 were long-time solar leaders such as Arizona, Nevada and North Carolina, as well as surprises like Minnesota and Mississippi, which had the 5th and 9th largest markets in the quarter, respectively. Texas, which is projected to be the second largest state solar market over the next five years, had its strongest quarter ever, adding 378 MW in Q2, placing it 2nd among states this quarter.

The utility-scale segment represented 58 percent of the PV capacity installed in the quarter. In fact, Q2 marked the seventh straight quarter in which the U.S. added more than a gigawatt (GW) of utility-scale solar.

According to the report, 563 MW of residential solar PV was installed in the U.S. in the second quarter of the year. While this is a slight uptick over the first quarter, it represents a 17 percent decline year-over-year.

"Slowdown in residential solar is largely a function of national installers scaling back operations in major state markets as they prioritize profitability over growth," explained GTM Research Solar Analyst Austin Perea. "While California was the first major market to exhibit signs of slow-down in Q1, many major Northeast markets began to feel the impact of national installer pull-back in Q2 despite a stable policy environment and strong market fundamentals."

The report forecast that the solar industry will add 12.4 GW of new capacity this year, down slightly from GTM Research's previous forecast of 12.6 GW.

The report did not change its forecast that the American solar industry would triple cumulative capacity over the next five years.

However, trade relief, which is being considered by the U.S. International Trade Commission, could radically affect the solar outlook and "would result in a substantial downside revision to our forecast for all three segments," the analysis said.

In a June report, GTM Research said that the requested floor price, if approved, would cut cumulative demand in half over the next five years. SEIA says the petition could cause the solar industry to shed 88,000 jobs just in 2018. Last year, U.S. solar companies added 51,000 workers.

Key Findings

  • In Q2 2017, the U.S. market installed 2,387 MWdc of solar PV, an 8 percent increase year-over-year and the largest second quarter ever.
  • Through the first half of 2017, 22 percent of all new electric capacity brought online in the U.S. has come from solar, ranking second over that time period to natural gas.
  • Suniva's filing of a Section 201 petition to impose trade remedies on foreign-manufactured cells and modules threatens to significantly reduce PV installations across all segments if accepted in its current form.
  • The residential sector grew 1percent quarter-over-quarter. The slow growth rate is caused by relative weakness in the California market and a slowdown in Northeast markets, which are feeling the impact of the pull-back from national providers.
  • In contrast to residential PV, the non-residential sector grew 31 percent year-over-year primarily driven by regulatory demand pull-in from policy deadlines in California and Massachusetts.
  • Voluntary procurement has emerged as the primary driver of new utility PV procurement, accounting for 59 percent of new procurement through H1 2017.
  • Installed system prices remain low across all market segments, with fixed-tilt utility-scale systems remaining under the $1/watt barrier for the second consecutive quarter.
  • GTM Research forecasts that 12.4 GWdc of new PV installations will come on-line in 2017.
  • Total installed U.S. solar PV capacity is expected to nearly triple over the next five years. By 2022, 31 states will have more than 100 MW annual solar markets—with 25 states being home to more than 1 GW of capacity—and more than 16 GW of solar PV capacity will be installed annually.
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Solar Soars as Suniva Case Looms

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There is never a dull moment in the solar industry, but one thing that has been consistent is growth. The Solar Energy Industries Association and GTM Research Q2 2017 U.S. Solar Market Insight report shows just that. The U.S. solar industry added more than 2,044 megawatts of new capacity in the first quarter of this year, marking the sixth straight quarter in which more than two gigawatts of solar was installed.

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Obama Administration Drastically Restricts Renewables in Southern California Desert

After eight years of work, the Bureau of Land Management's (BLM) Desert Renewable Energy Conservation Plan (DRECP) will effectively foreclose development of renewable energy resources on millions of acres of federally managed lands in Southern California, said a coalition of renewable energy and labor groups in response to the federal government's release of the plan. The plan abandons the initial promise to balance renewable development with preservation of desert land.

The Desert Sunlight Solar Farm is located in east Riverside County, California on 3,600 acres of federal land.First Solar, Inc.

The American Council on Renewable Energy (ACORE), the California Wind Energy Association, the California & Nevada State Association of Electrical Workers, Large-scale Solar Association (LSA) and the Solar Energy Industries Association (SEIA) said the plan will significantly and permanently limit solar and wind energy development on these public lands, and could hamstring existing state and federal environmental goals, as well as any future, more ambitious goals that could engender further growth of the clean energy economy.

Since the initiation of the DRECP in 2008, California has substantially increased its renewable energy and carbon reduction goals, and the Obama administration has declared even more ambitious plans to combat climate change. Unfortunately, the DRECP never changed to address the need for additional renewable energy.

"The DRECP has simply failed to adapt to enormous changes in law and policy that mandate a significant and urgent increase in renewable energy development on public lands and elsewhere," said Shannon Eddy, executive director of LSA. "The DRECP issued by the BLM today is a Model T in a Tesla world. Rather than fostering sustainable clean energy development as a part of a conservation plan, it severely restricts wind and solar."

The California desert is arguably the most important renewable energy resource area in the country, with world-class solar radiance and wind energy resources near major population centers.

"With today's [Tuesday's] release of the Desert Renewable Energy Conservation Plan, the Interior Department and BLM missed a golden opportunity to balance the preservation of parts of the California desert with clean, renewable energy development across some of America's richest renewable resource areas," said Tom Kimbis, acting president of SEIA. "The Obama administration is unparalleled in its support for renewables, but this plan permanently locks up some of our greatest untapped solar and wind resources, and chooses regulation over innovation and progress."

Of the nearly 11 million acres of public lands that the BLM studied as part of the DRECP, the final plan sets aside less than 388,000 acres for renewable energy development, much of which BLM acknowledges is not appropriate for solar and wind projects.

The plan also punts identification of additional lands for renewable energy development to an elusive "Phase 2." The groups expect little coordination between the BLM and counties since the focus will be on private lands, and renewable energy developers doubt that the next phase will yield the lands necessary to meet long-term energy and climate goals.

Approximately three million acres that had been available for solar and wind development are rendered off-limits under the plan. "No one is saying that utility-scale renewable energy should go everywhere, but done responsibly and with safeguards, it does have to go somewhere if we are to meet state, national and global carbon-reduction goals," said Nancy Rader, executive director of CalWEA. "The broad-scale ban on wind-energy development represented by the BLM's plan indicates an unwillingness to confront the reality of our climate-change predicament."

The groups also highlight the squandered opportunity to create jobs and economic growth associated with utility scale renewable development. From research and development to manufacturing and construction, solar and wind projects have created 100,000 jobs to date nationwide.

"The plan misses an opportunity to put thousands of people to work in high-paying jobs," Richard Samaniego, secretary-treasurer of the California State Association of Electrical Workers, said.

"It is disappointing that the plan does not reflect better balance," added Gregory Wetstone, president and chief executive officer of ACORE. "We can protect desert habitat without effectively prohibiting pollution-free wind and solar energy development on millions of acres of the planet's best renewable resources."

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Solar Supporters: Florida's Amendment 1 Is a 'Wolf in Sheep's Clothing'

By Sean Gallagher

Three cheers for solar in Florida! Amendment 4 officially passed on Aug. 30. We found the magic policy lever and now Floridians will begin reaping the benefits of low cost, clean solar energy. You can expect to see solar projects popping up all over the Sunshine State, right? Not exactly. In fact, the fight is just beginning for the future of solar energy in Florida.

Workers installing solar panels at the Orange County Convention Center in Orlando, Florida.Solar Source

First—a quiz. Below is the text for each of the solar-related constitutional amendments. One amendment was endorsed by solar companies and environmental groups, and the other is supported by the state's major utilities. Can you distinguish one from the other?

Option A: This amendment establishes a right under Florida's constitution for consumers to own or lease solar equipment installed on their property to generate electricity for their own use. State and local governments shall retain their abilities to protect consumer rights and public health, safety and welfare, and to ensure that consumers who do not choose to install solar are not required to subsidize the costs of backup power and electric grid access to those who do. (Source: Ballotpedia)

Option B: Proposing an amendment to the State Constitution to authorize the Legislature, by general law, to exempt from ad valorem taxation the assessed value of solar or renewable energy source devices subject to tangible personal property tax and to authorize the Legislature, by general law, to prohibit consideration of such devices in assessing the value of real property for ad valorem taxation purposes. This amendment takes effect Jan. 1, 2018, and expires on Dec. 31, 2037. (Source: Ballotpedia)

Confused? Unless you're a solar energy policy wonk, Option A's clear language on a consumer's right to go solar is likely more palatable than Option B's use of the phrase "ad valorem."

Orange County Convention Center in Orlando, Florida.Solar Source

Let's dig a little deeper. Option A is actually the text of Amendment 1 which is on the Florida ballot in November's general election. Amendment 1 is publicly supported by Consumers for Smart Solar—again, to the untrained eye, a seemingly pro-solar advocacy group.

In reality, Consumers for Smart Solar is a front group for the largest electric utilities in the state of Florida, think Duke Energy and Florida Power and Light. That doesn't automatically mean that the group or amendment is trying to "kill solar," but it merits a closer look at the language and national trends in solar policy to uncover its true intentions.

The first sentence is relatively innocuous: "This amendment establishes a right under Florida's constitution for consumers to own or lease solar equipment installed on their property to generate electricity for their own use."

Consumer beware: this language does not create a new right for a customer to go solar, it is simply restating existing rights.

Millhopper Library in Gainesville, Florida.Solar Impact

The second sentence is where things get complicated. A standard talking point from electric utility trade groups across the country is that consumers that opt to have solar energy for their homes disproportionately burden customers who do not have solar systems.

In the short term, many costs are fixed for electric utilities. By the nature of the utility business model, these fixed costs are spread out across customer classes. In exchange for providing reliable service, monopoly utilities are allowed to recover their capital investments and receive a modest rate of return. That business model is likely the reason you have utility company stocks in your 401K.

This "cost shift" issue in the second sentence of Amendment 1 incorrectly assumes that there is indeed a cost imposed by consumers that choose to go solar. Solar advocates across the country are working to change this one-sided assumption by including a more balanced approach that quantifies all costs and benefits.

Solar provides many benefits to the electricity grid including producing energy at peak times of the day, reducing greenhouse gas emissions and helping utilities avoid costly capital investments ultimately borne by ratepayers.

The solar industry is the underdog in this fight and we need solar supporters across the country to expose Amendment 1 for what many are calling "a wolf in sheep's clothing."

"Masquerading as a pro-solar energy initiative, this proposed constitutional amendment, supported by some of Florida's major investor-owned electric utility companies, actually seeks to constitutionalize the status quo," Florida Supreme Court Justice Barbara Pariente wrote in a dissent back in March.

So Florida voters, here's what should be today's biggest test takeaway: Know what you're really voting for and vote "No" in November on Amendment 1.

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