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The solar market had its weakest quarter in two years

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Illustration of a hurdle with a thin solar panel as the bar.

Illustration: Aïda Amer/Axios

New solar installations in Q1 plummeted by 52% from Q4, marking the sector's weakest quarter in two years, according to the latest market report from SEIA/Wood Mackenzie.

Why it matters: Supply chain woes have exacted a huge toll on the U.S. solar market — long before the Commerce Department's anti-circumvention investigation, which didn't start until the final days of Q1.

By the numbers: The U.S. solar market saw 3.9 GWdc of new installations last quarter — a 24% drop from the Q1 2021.

Yes, but: Solar alone accounted for half of new generating capacity added to the U.S. grid last quarter.

The details: Surging commodity prices and long shipping delays hammered the utility-scale and commercial solar segments.

  • Utility-scale solar experienced its worst quarter since 2019, with new installations free-falling by nearly two-thirds from just the previous quarter.
  • Commercial solar, meanwhile, saw respective 11% and 28% drops year-over-year and quarter-over-quarter.
  • By contrast, residential solar posted its best quarter ever: 1.2 GWdc installed, a 30% jump from Q1 2021.

What's next: Even with the 24-month reprieve on tariffs that the Biden administration announced Monday, the outlook for new solar installations remains relatively grim.

  • "The uncertainty created by the anti-circumvention investigation has reduced expectations for 2022 solar installations to 15.6 GWdc," SEIA/Wood Mackenzie writes.
  • That's a 29% drop from the 2022 outlook from last quarter, the report says: "Over the last nine months, 2022 forecasts have been cut in half."
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