New solar installations in the United States are expected to rise by one-third this year, in spite of the slowdown brought about the coronavirus pandemic, while coal’s share of electricity generation falls by about 25%, according to data released last week.
Overall, a key U.S. government data agency expects wind and solar to be the fastest-growing sources of new electricity production in 2020, Utility Dive reports.
On Thursday, the Solar Energy Industries Association (SEIA) and analysts at Wood Mackenzie reported the U.S. solar market hit a record in the first three months of this year, with 3.6 gigawatts of new capacity installed. “Though overall installations are expected to fall in 2020 compared to 2019, utility-scale solar’s strong performance is expected to boost the sector’s growth by 33% this year,” the industry newsletter adds.
It was a very different story for the country’s failing coal industry (and for the failed reality TV star trying to boost that industry’s fortunes from his increasingly tenuous post in the White House), where production “is anticipated to fall 25% in 2020 due to slowed industrial production under the current economic recession,” Utility Dive says, citing the latest short-term outlook from the U.S. Energy Information Administration (EIA).
The EIA “forecast solar and wind energy will be the ‘fastest-growing source of electricity generation in 2020’, projecting the installation of 23.2 GW of new wind capacity and 12.6 GW of utility-scale solar capacity, slightly less than SEIA and WoodMac’s estimate of over 14 GW.”
Coal “was previously in decline due to poor economics compared to the growing wind, solar, and natural gas industries, but a drop in industrial demand will lead the coal sector to take a large hit this year,” Utility Dive explains. That shift in the economy will be enough to drive coal down from 24 to 17% of total power generation, though the EIA sees it rebounding to 23% in 2021.
In the course of this year, gas is expected to increase from 37 to 41%, before falling to 36% next year due to higher prices. Solar and wind will grow from 17% in 2019 to 21% in 2020 and 23% in 2021.
But despite the strong overall numbers, the SEIA still sees construction delays, lower customer demand, and “issues with tax credit qualification” producing a tough year for solar, Utility Dive says. Residential solar installations are on track to fall 25% this year, before recovering 26% in 2021.
“While the utility segment shows promise with sustained levels of procurement so far, lower energy demand due to productivity loss and wholesale electricity market price drops will add to the uncertainty,” said Wood Mackenzie Head of Solar Ravi Manghani. “All in all, the pandemic and the ensuing economic slowdown will weigh heavily on the solar industry in the coming months if the economy is slow to recover and financing dries up.”