Solar makes up 75% of new US power generation in first quarter of 2024
PV continues stellar growth as manufacturing capacity also expands, key report says
US first quarter grid-scale solar installations surged 135% to a record 9.8GW versus a year earlier, as developers were able to tap greater imported panel supply and partially complete a backlog of projects that were slated to come online in 2023, according to a new report by Wood Mackenzie and Solar Energy Industries Association (SEIA).
Also driving activity is President Joe Biden’s anticipated lifting today of a two-year tariff waiver on Chinese branded crystalline silicon modules sourced from Cambodia, Malaysia, Thailand, and Vietnam.
The temporary waiver has contributed to increased imports and higher module inventory levels. Imports under the waiver that are subject to circumvention tariffs must be utilised within 180 days of expiration, or 3 December. This has driven increased installation activity at the start of this year.
The waiver has remained in effect despite a US Department of Commerce determination last year that four of eight leading Chinese PV producers were routing their supply chains through those nations to avoid tariffs on imports from China. Another 22 companies are under investigation.
Total solar additions were also a first quarter record of 11.8GW including grid-scale, commercial, community, and residential segments. Solar accounted for 75% of all new electricity-generating capacity additions.
“This quarter proves that new federal investments in clean energy are revitalising American manufacturing and strengthening our nation’s energy economy,” said SEIA CEO Abigail Ross Hopper.
Michelle Davis, head of global solar at Wood Mackenzie and lead author of the report, said, “The US solar industry continues to show strength in terms of deployments.”
She cautioned at the same time, the industry faces challenges to its continued growth including “availability of labour, high voltage equipment constraints, and continued trade policy uncertainty.”
Last week, GE Vernova CEO Scott Strazik said his company today is booked for orders into 2027 for supply of switchgears and transformers. “What will happen is we hope to add more ability to grow into this cycle by ‘27, but it’s not going to change ’25 or ’26 very much,” he said.
The report does not yet incorporate the impacts of potential new antidumping and countervailing duties on crystalline silicon cells and modules from the Southeast Asian nations.
“It is still early days for these cases, with the timeline and tariff levels for any potential new tariffs still highly uncertain,” said the report.
“But it’s important to note that there is sufficient cell and module production capacity outside the target countries to serve the US market, along with domestic production and thin film production,” it added.
Wild card Trump
A political wild card is Donald Trump’s potential return to the White House in January next year. National polls show the presumptive Republican candidate ahead of President Joe Biden with five months remaining before national elections.
Trump is expected to target China early by hiking existing tariffs on a range of goods and impose new ones. This would not impact the industry here much as present tariffs have limited imports of Chinese-made solar cells and modules to about 0.1% of annual US installations.
Ratcheting up tariffs on Chinese branded solar products from the four nations in Southeast Asia, source of around 81% of installed imports here, and/or on those from other sources could cause disruption even with billions of dollars in new domestic production coming online.
The US industry added 11GW of new module manufacturing capacity here in the US during the quarter, according to the report.
Woodmac sees total US solar capacity doubling over the next five years to 438GW by 2029, or roughly 40GW of new capacity annually. This will be led by commercial and community solar.
Utility-scale, the biggest segtment, will grow only 3% on average due to supply chain constraints and potential tariffs affecting product supply, while remaining flat this year and in 2025.
(Copyright)