Dive Brief:

• Following a strong first quarter of solar photovolatic installations, Wood Mackenzie Power & Renewables is forecasting 25% growth in 2019 compared with 2018, and it expects more than 13 GW of DC installations this year.
• The 2.7 GW of solar PV installed in the first quarter was the most ever installed in a Q1, according to the analysis. The United States also notched another milestone, hitting a total of 2 million solar installations in the first thee months.
• The largest share of installations came from the utility segment, which installed 1.6 GW to make up 61% of new capacity. With 4.7 GW of large-scale projects under construction this year, the report concludes utility PV additions will grow 46% over 2018.

Dive Insight:

The United States' solar market had its most successful first quarter ever, but analysts at Wood Mackenzie say there are challenges ahead.

Despite "steady installations" in the first quarter, Wood Mackenzie Solar Analyst Austin Perea in a statement said the residential market "is still highly reliant on legacy state markets, such as California and the Northeast, which have seen only modest to flat growth over the past several quarters."

Looking ahead, Perea said that as those legacy state markets continue to grow past early-adopter consumers, "higher costs of customer acquisition will challenge the industry to innovate product offerings and diversify geographically."

However, the residential market still saw 6% growth compared to the first quarter of 2018, with 603 MW installed in Q1. And the report showed 29% of those residential capacity installations came from markets outside the top 10 solar states, "the highest share for emerging markets in industry history."

There was a decline in the non-residential segment, according to the report, which includes commercial, industrial and public sector distributed solar. The 438 MW installed in Q1 2019 was down compared to the previous and year-ago quarters, analysts concluded. This was largely due to state-level policy reforms and interconnection delays in historically strong markets, including California, Massachusetts and Minnesota that "continue to hamper growth."

Non-residential installations were down 28% compared to the fourth quarter of 2018 and 18% compared to Q1 2018. However, analysts also said community solar mandates in New York, Maryland, Illinois and New Jersey "will help reinvigorate the segment beginning in 2020."

New York's Value of Distributed Energy Resources docket has "bolstered our long-term forecasts for both commercial and community solar," the report concluded, adding that a boost to the renewable portfolio standard in Maryland will grow the solar renewable energy credit market there, "to the benefit of the entire non-residential segment."

Wood Mackenzie and SEIA project that total installed photovoltaic capacity in the United States will more than double over the next five years. The firms expect annual installations will grow to 16.4 GW in 2021.