The U.S. photo voltaic market registered pandemic-related ache within the second quarter of 2020, as anticipated, after logging its highest first quarter of development ever on the outset of the yr.
Residential photo voltaic installations dropped by practically 25 p.c from Q1 to Q2 2020, in accordance with the latest information from Wooden Mackenzie and the Photo voltaic Power Industries Affiliation. The April to June interval was the primary quarter that overlapped totally with the coronavirus pandemic.
However the declines hit the nation erratically, with essentially the most vital drops in residential photo voltaic installations related to extra restrictive native shutdown orders.
Total, analysts have softened their view of how severely the pandemic will constrain photo voltaic development this yr; on the finish of Q1, analysts anticipated the market to undercut pre-COVID forecasts by 9 p.c. WoodMac and SEIA, in forecasts launched Thursday, now count on declines of 6 p.c beneath pre-pandemic forecasts.
Even with an unsure street forward, the photo voltaic market remains to be anticipated to develop in 2020, with capability additions anticipated to rise 37 p.c yr on yr. That’s as a result of whereas the coronavirus chilled residential installations, the large-scale market continued its upward trajectory within the second quarter.
“The quantity of initiatives that we’ve seen introduced in Q1 and Q2 has been fairly excessive,” mentioned Colin Smith, a WoodMac senior photo voltaic analyst. “The event pipeline is the largest we’ve ever seen.”
Largely unaffected by shutdown orders, utility-scale installations accounted for 71 p.c of the full three.5 gigawatts introduced on-line in Q2. All advised, analysts count on builders to finish a complete of greater than 18 gigawatts of initiatives, up from 13.three gigawatts in 2019.
Components behind residential market’s relative buoyancy
The numbers from WoodMac are on the upper finish of what most of the rooftop photo voltaic business’s largest nationwide gamers reported in Q2 earnings calls.
SunPower’s installations fell practically 30 p.c from Q1 to Q2, whereas business chief Sunrun’s set up’s fell about 20 p.c. Vivint Photo voltaic, which is able to quickly be acquired by Sunrun, reported an set up drop of 10 p.c from Q1 to Q2, and Sunnova’s installations fell 9 p.c. Small and regional installers have been extra prone to really feel difficulties offered by the coronavirus than the massive, well-resourced nationwide gamers.
The residential business’s aggressive makes an attempt to pivot to on-line gross sales within the face of shutdowns softened the blow of orders that eradicated door-to-door pitches and compelled gross sales to a pc display screen. The designation of photo voltaic as a vital enterprise in most places additionally helped installers get better from an preliminary set up freeze. And finally, many high photo voltaic states, similar to Florida, Arizona and Texas, are led by conservative governors. As shutdown orders turned politically polarized, governors in these states didn’t institute the identical kinds of public well being rules as their counterparts in California and the Northeast.
Heading into late 2020 the turbulent economic system presents future headwinds for each residential and large-scale photo voltaic. Although rooftop photo voltaic firms have pitched their product as a approach for householders to save cash in a recession, it’s unclear if gross sales will again that reasoning with information. On the similar time, the COVID-19-related recession has disproportionately damage low-wage and hourly service staff, who’re much less prone to personal properties and thus be capable of entry residential photo voltaic. Total, within the first quarter of the yr, analysts anticipated challenges for rooftop photo voltaic to depress 2020 installations 32 p.c beneath pre-pandemic expectations.
A constrained tax fairness market can be anticipated to hit large-scale initiatives. Which will push installations initially slated for this yr into 2021 and a few anticipated to return on-line subsequent yr into 2022.
“It appears like a really new time, and really fascinating time to be doing utility photo voltaic. It’s nonetheless going ahead in a really robust approach,” mentioned Smith. “We’ve simply had some extent the place there’s a variety of uncertainty in particular person initiatives based mostly on a glut of initiatives all attempting to get financing [and] on the similar time COVID-19 inflicting uncertainty.”