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The U.S. tariffs on imported solar cells and modules created uncertainty in the market earlier this year, resulting in quarterly additions of utility-scale solar dropping in Q3 below 1 gigawatt for the first time since 2015, yet the project pipeline points to a strong rebound in Q4, a new report by Wood Mackenzie Power & Renewables and the Solar Energy Industries Association (SEIA) showed on Thursday.
The tariffs, enacted in early February, created uncertainty in the market in the latter half of 2017 and in early 2018, pushing back projects until operators had a clearer view about the implementation of the tariffs and their impact on project economics, according to the Q3 U.S. Solar Market Insight Report.
While utility-scale solar installations dipped in the third quarter, the residential solar market continued to stabilize this year after a weak 2017.
The overall U.S. market installed 1.7 GW of solar PV in the third quarter, down by 15 percent on the year and down 20 percent sequentially.
However, a strong project pipeline lies ahead, according to the report.
“Developers originally planning to bring projects online in Q3 2018 were forced to push out completion dates to Q4 2018 or Q1 2019 due to uncertainty around tariffs,” Colin Smith, Senior Analyst at Wood Mackenzie, said.
“We did, however, see utility PV procurement outpace installations fourfold in Q3, showing that despite the tariffs causing project delays, there is substantial growth ahead for the U.S. utility PV sector,” Smith noted.
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Wood Mackenzie sees 3.5 GW of utility PV installed in the U.S. in Q4, which would make it the biggest quarter for utility PV installations since Q4 2016.
For full-2018, the analysts see virtually flat growth in installations compared to 2017. By 2023, however, total U.S. installed PV capacity is expected to more than double.
“If not for the tariffs, the U.S. solar market would undoubtedly look better today than it does now,” said Abigail Ross Hopper, SEIA’s president and CEO. “However, as this report shows, this is a resilient industry that cannot be kept down for long. With smart policies in place, the potential for the solar industry is hard to overstate.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.