U.S. Solar Installations Dropped 22 Percent in 2017 — Even Worse Than Expected

After years of strong growth, U.S. solar installations are expected to fall 22 percent in 2017, worse than previously expected. The decline is due to weaker demand for residential panels and the delay in large projects because of concerns that the Trump administration would impose tariffs on imported equipment, according to an analysis from the energy group GTM Research.

The U.S. installed 11.8 gigawatts of new solar electricity capacity this year, compared with 14.6 gigawatts in 2016. Analysts say 2016’s record growth was fueled in part by developers racing to take advantage of a federal tax credit that was scheduled to expire. GTM Research projected that solar installations will decline again in 2018, but resume their growth in 2019.

Solar installers have been wary to move forward on large projects this year due to a trade case brought by U.S. manufacturer Suniva, which argues that low-cost imported panels, particularly from China, are hurting the growth of the American solar businesses. President Trump is expected to make a final decision next month on whether to impose a tariff on imported panels. In the meantime, the uncertainty about the outcome of case has led to a shortage in solar panel supplies and an increase in equipment costs, GTM Research reported.

One bright spot was commercial sector solar installations, which include projects for businesses and small communities. Installation of commercial solar projects rose 22 percent from the third quarter of 2016.