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Apr 23, 2024

Commercial Solar Market Shows Resilience with 27% Growth in 2023

August 7, 2023

Category: news

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The commercial solar sector continues to grow with impressive growth in the first quarter of 2023. According to a recent report from the Solar Energy Industries Association (SEIA), over 391 MWdc (megawatts, direct current) of commercial solar capacity was installed during the first quarter of 2023, making a significant 27% increase compared to the same period in the previous year (Q1 2022). These increases seem to result from the recent changes in policies, both by state and federal governments, such as ITC Adders, and NEM policies.

This surge in installations is noteworthy despite the challenging year previously marked by supply chain constraints in 2022. Despite the difficulties faced by the solar industry during that period, the commercial solar market has managed to bounce back, indicating its potential for sustained growth in the coming years. The report also showed a slight decline of 19% from the previous quarter. According to the report, this dip is likely a temporary effect of the supply chain challenges experienced towards the end of 2022.

The implementation of recent state policies such as Californias NEM 3.0 policy from Arpil is likely to impact the commercial solar markets growth in the state and to set a precedent in many other states as well. Since the announcement of the policy, installers and end-user solar adopters rushed to submit interconnection applications, and because of the implementation of the policy, projects are expected to be completed in the next 18-24 months. While these policies present exponential growth, its usually followed by a decline and then stable levels of growth. Despite this, experts are projecting 11% growth in 2027 and 14% growth in 2028, driven by emerging markets and the impacts of the Investment Tax Credit (ITC) adders. The Investment Tax Credit (ITC) adders will play an important role in stimulating the economy and the commercial solar sector. The ITC, which provides businesses and individuals investing in solar energy systems, is set to drive further growth and tech advancements in the market over the next few years.

With supply chain constraints gradually easing, the commercial solar market is poised for further expansion. Experts predict a continued growth trend of a 12% rate for installations in 2023. This project reflects optimism in the market and for future projects. In 2024, this rate is expected to grow to 13% of continued installations.

The commercial solar markets performance in Q1 2023 reflects its resilience and potential for further growth. With the easing of supply chain constraints and the promise of supportive policies and incentives, the market is likely to see further development and growth moving forward. New policies like that of the ITC Adders and NEM 3.0 policy set precedents and examples for potential market growth, with long-term optimism for the years ahead. As businesses continue to prioritize sustainability, commercial solar installations are expected to play a vital role in our efforts of moving to a cleaner and more sustainable future.

 

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