The U.S. solar industry saw record growth last year, adding 19.2 gigawatts of capacity, according to a new report released by the Solar Energy Industries Association.
Solar led all technologies in new electric-generating capacity for the second year in a row, making up 43% of the new electric generation capacity added in 2020, the U.S. Solar Market Insight 2020 Year-in-Review report shows.
This growth is expected to continue. The solar industry will quadruple its capacity in the next decade, according to a forecast by Wood Mackenzie, the firm that completed the report.
Pennsylvania and Ohio are a big part of that growth. Pennsylvania more than doubled its solar capacity in 2020, adding 189 megawatts of capacity. That brings it up to 265 megawatts of capacity total.
Ohio tripled its capacity last year, going from 76 megawatts in 2019 to 237 megawatts in 2020.
Both states also jumped into the top 20 for state photovoltaic installations in 2020. Pennsylvania was ranked 16th for solar installations in 2020. It was previously at 25th place the previous two years.
Ohio is ranked 18th for solar installations in 2020, previously sitting at 27th place in 2019 and 29th place in 2018.
Growth in manufacturing
Ohio also played a role in the growth of manufacturing. In 2020, 4.3 gigawatts of modules were produced in the U.S., a record since the Solar Energy Industries Association began tracking such data.
First Solar, the largest manufacturer of of solar panels in the U.S., built a new module manufacturing facility in Lake Township, Ohio. The new plant went into full production in early 2020, accounting for much of the module manufacturing sector’s year-over-year growth, according to the report.
First Solar already had a factory in Perrysburg, Ohio. The global company has an annual production capacity of 1.9 gigawatts in the U.S., all of which happens in Ohio.
The industry’s growth is expected to continue with the two-year extension of the federal solar investment tax credit that was lumped into the end-of-year federal spending and COVID-19 relief package.
The tax credit program for new solar installations was set to drop to 22% in 2021. Then it would go down to 10% in 2022 for commercial installations and cease to exist for residential systems.
But the program was extended, meaning all new solar installations can receive the 26% tax credit in 2021 and 2022. All markets will drop to 22% in 2023. In 2024, the residential systems credit will be eliminated and commercial markets will sit at 10%.
The report found growth will also continue as the costs to install solar fall and options to finance projects become more widely available. Efforts by states and companies to hit renewable energy goals will drive utility-scale installations. The operating solar capacity is expected to increase from nearly 100 gigawatts to more than 400 gigawatts by 2030.
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