Because the COVID-19 pandemic wears on in the USA, the toughest hit section is prone to be business photo voltaic — initiatives constructed on companies, faculties, and authorities buildings.

In comparison with its pre-pandemic forecast, Wooden Mackenzie is forecasting a 32 p.c drop in business photo voltaic installations in 2020. Business companies — massively impacted by present financial situations — will possible decide out of discretionary investments like putting in photo voltaic this yr.

However what’s the true potential of this market post-2020? Wooden Mackenzie and Station A, an AI-enabled clear vitality market, collaborated on a first-of-its-kind evaluation to search out out.

Quantifying the untapped potential

Traditionally, measuring business photo voltaic potential has been difficult resulting from an absence of dependable knowledge. By combining Wooden Mackenzie’s project-level photo voltaic knowledge with Station A’s building-level knowledge*, WoodMac was capable of get an correct bottom-up view of this marketplace for the very first time.

The important thing findings gained’t shock anybody within the business photo voltaic business: there’s large market potential.

About three.5 p.c of all business buildings have photo voltaic and one other 1 p.c are connected to neighborhood photo voltaic subscriptions, the place clients purchase energy from a photo voltaic venture situated in the identical utility territory.

Not all buildings spend sufficient cash on electrical energy to make photo voltaic a worthwhile funding. When you account for these buildings — roughly 25 p.c of the constructing inventory — you’re left with roughly 70 p.c of the business buildings as potential targets for photo voltaic installers. That equates to greater than 600,000 websites and 145 gigawatts of photo voltaic capability potential.

Why isn’t business photo voltaic rising extra quickly?

Wooden Mackenzie’s outlook has the business photo voltaic market rising at roughly 2 gigawatts a yr from 2021-2025, bringing the put in whole to round eight p.c of the overall addressable market.

However regardless of the big market potential, main challenges stay. Not like residential photo voltaic that has standardized financing or utility-scale photo voltaic that has the advantage of scale, business photo voltaic has neither.

Every business photo voltaic venture has a excessive diploma of customization and complexity. The work and expense concerned in buying a buyer and acquiring financing incessantly kill offers. And the pandemic could quickly exacerbate these issues by inflicting financiers to be extra conservative.

These are powerful challenges that depend upon quite a few monetary and regulatory elements. And there’s a litany of progressive corporations working exhausting to unravel these issues. If they are often overcome, a large addressable market awaits.


The brand new business photo voltaic market evaluation with Wooden Mackenzie and Station A is obtainable right here. Michelle Davis is a senior photo voltaic analyst at Wooden Mackenzie.

*Station A’s AI-enabled platform consists of the vast majority of business buildings within the U.S. which have not less than 10,000 sq. ft of roof area, roughly the equal of a 70-kilowatt photo voltaic venture.

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