Hello, dear solar enthusiasts! Let me share some noteworthy updates and insights with you from the solar industry. As someone who’s deeply embedded in this sector, I can tell you that the development of the distributed generation, particularly solar panels for your home, has not been a consistent upward journey.
According to a report by Ohm Analytics, there was an unexpected contraction in the solar industry during the fourth quarter of 2023, which apparently ended the glorious streak of growth we witnessed for distributed generation, including solar arrays for home use. It’s thought-provoking indeed, because if this downturn doesn’t correct soon, the residential solar sector is projected to face a sharp drop of 20-30% in 2024.
You see, historically, the residential solar market has been a critical factor fueling the growth of the distributed solar industry. A significant increase in the deployment of solar panels for homes stimulated its growth. But 2023 witnessed a slowdown, with the growth rate falling to just 8%, as compared to 2022, and the fourth quarter furthering this downturn by 7%.
Now, with the slump in the residential sector extending into 2024, there’s speculation whether the commercial, industrial, and community solar sectors can step up to keep the solar market afloat.
In the fourth quarter of 2023, there was an encouraging 9% growth in smaller commercial and industrial sectors, and community solar fared well with 3% growth. So, could these sectors soften the impact of residential solar decline? It’s a question that only time can answer.
You can trace this downward trend in residential solar back to increasing interest rates and California’s decision to tap the brakes on net metering incentives that led to slower moving finance companies exiting businesses. These critical changes had led many to rush and submit their applications before the April 14, 2023 deadline due to the switch to NEM 3 in California.
Interestingly, the fourth quarter’s dull performance wasn’t felt uniformly across the nation. States like Texas, Florida, and Arizona, where solar company loans are prominent, were most affected. On the brighter side, northeastern states demonstrated continuous growth. In fact, New York and New Jersey registered a 20% growth, while Pennsylvania enjoyed an impressive 80% expansion.
Despite the hurdles, I see a silver lining: the growth of energy storage in correspondence with the establishment of NEM 3 in California. In fact, 2023 saw residential storage increase by 22%, with a marked increase of 66% in the final quarter of 2023. This surge is in alignment with the fall in energy storage battery cell prices and the significant global expansion that occurred in this sphere during 2023.
However, Roth MKM warns that the current weakness in the residential solar sector is likely to continue into 2024. If there is no turnaround by May or June 2024, we could see the residential solar sector fall from its 2023 figures of 6.5 GW to something around 20-30% lower. This substantial drop calls for attention – and effective strategies from solar companies to avert this potential crisis.
Stay tuned for more updates on the solar industry. As always, I’m here to provide you with the knowledge and tips you need to make wise decisions about solar for your homes and businesses. Until next time, keep reaching for the sun!
Original Articlehttps://pv-magazine-usa.com/2024/03/19/slowing-distributed-energy-growth-continues-into-2024/
