According to a report released by the US Energy Information Administration on September 2, shipments of PV modules in the US in 2020 totaled 21.8 peak GW (million peak kW), reflecting an increase of 5.4 peak GW from 2019. This figure represents a new record high and indicates that the PV market in the US was growing last year despite disruptions caused by the COVID-19 pandemic. Imports accounted for 89% or 19.3GW of the annual total module shipments in the US for 2020, showing an increase of 26.3% when compared with 15.3GW of module imports for 2019. The leading module importer to the US in 2020 was Vietnam, followed by Malaysia, South Korea, and Thailand. It should be noted that module shipments include imports, exports, and modules manufactured and sold domestically.
The report from the EIA stated that the demand for residential PV systems rose last year due to several factors. First, consumers had more time for pursuing home improvement on account of the pandemic. Second, there was an installation rush as PV project developers wanted to complete grid connection before a further reduction in the solar Investment Tax Credit (ITC). Third, the build-out of utility-scale PV projects continued thanks to the favorable policies and market environment. Finally, costs of PV systems were on the decline.
The EIA tracks module shipments and capacity growth. In the report, the agency noted that the difference between the module shipment figure and the capacity growth figure for the same period has to do with the lag time between shipments and installations. Projects or systems that are 1MW or greater in scale are labeled by the agency as utility-scale PV capacity additions, whereas those that smaller than 1MW are designated as small-scale PV capacity additions or residential PV capacity additions.
The EIA’s data show that the PV generation capacity in the US rose by 25% between 2019 and 2020. The utility-scale PV capacity and the small-scale PV capacity in the country grew by 29% and 19% respectively during the same period. As mentioned earlier, the anticipated reduction in the ITC triggered a surge in installations last year. The subsidy rate was originally set to lower from 26% to 22% at the end of 2020. However, the US Congress passed an extension for the existing rate in December last year. The rate of 26% will be applicable for PV systems installed from 2020 to 2022, and the rate 23% will be applicable to PV systems installed from 2023 onward.
Regarding the impact of the pandemic on the supply chain, the EIA said that there were disruptions to module production and shipments during 2020. Nevertheless, shipments grew on the back of rising demand, which in turn was driven by the consistent reductions in module costs since around 2010. The EIA’s data on the average value of module shipments in the US reveal a decline from US$1.96 per peak W in 2010 to US$0.38 per peak W in 2020. The EIA pointed out that the average value of shipments was a proxy for price. Costs fell steadily across the supply chain over the past decade. In the same period, manufacturers for PV products kept raising production capacity. Consequently, module prices were on the downtrend.
Vietnam, Thailand, and Malaysia have emerged as the major exporters of PV modules to the US in the recent years in part because integrated Chinese manufacturers for PV products have set up factories in those countries. Bloomberg and other news agencies reported in August that a group of American solar enterprises has filed a petition to the US Department of Commerce requesting an investigation on imports from Southeast Asia. The group is arguing that Chinese manufacturers are circumventing the American tariffs by expanding production capacity overseas.