The United States is poised to witness a surge in community solar installations, with cumulative capacity forecasted to exceed 14GWdc in existing state markets by 2028, according to the latest report released by Wood Mackenzie in collaboration with the Coalition for Community Solar Access (CCSA).
Annual installation volumes have consistently reached around 1GWdc for the third consecutive year in 2023, with an anticipated 8% average annual growth through 2028, the report revealed.
Caitlin Connelly, research analyst and lead author of the report, highlighted the drivers behind near-term growth in Wood Mackenzie's national outlook, citing robust pipelines in existing state markets such as New York and Illinois. Connelly stated, “Longer-term, newer state markets support lasting growth as mature markets saturate. Additionally, developers will begin to benefit from the incentives within the Inflation Reduction Act as soon as this year.”
Wood Mackenzie projects that 7.6GWdc of new community solar capacity will be added online in existing state markets between 2024 and 2028, with the national market expected to surpass 10GWdc of cumulative capacity by 2026.
See also: U.S. Department of Energy Seeks Developers for Solar Project on Former Nuclear Test Site in Nevada
Community solar installations reached a total of 827MWdc through Q3 2023, marking an 8% increase compared to the first three quarters of 2022.
In a significant development, community solar accounted for 40% of total US non-residential solar capacity in 2023, underscoring its growing significance in the renewable energy landscape, as per Wood Mackenzie's findings.
Connelly further elaborated on the evolving nature of community solar, stating, “The early years of community solar served almost exclusively commercial anchor customers; however, stricter LMI requirements in state programs and the availability of LMI-focused federal incentives are beginning to reveal a more well-rounded, community-focused subscriber profile.”
See also: U.S. Power Landscape: Wind and Solar to Lead Growth Over the Next Two Years
enzie and CSSA's reporting also incorporates alternative forecasts to assess key market uncertainties, particularly the impact of state and federal legislation on community solar deployment.
Given the regulatory dependencies inherent in community solar, analysis indicates a greater downside risk than upside potential in existing state markets. Under a bullish scenario, the national five-year forecast could see a 13% increase compared to Wood Mackenzie's base case, while a bearish scenario could result in a 38% decrease.
However, Wood Mackenzie underscored the potential for additional upside, with the establishment of new state markets poised to augment forecasts by at least 10% if enabling legislation is enacted.
