The US installed a calendar-year record 23.6GW of solar capacity on a direct current basis in 2021, but growth will slow despite a bursting project pipeline and robust demand as challenging global economic trends continue to put utility-scale projects at risk, according to a new report by Wood Mackenzie and the Solar Energy Industries Association (SEIA).

Installations last year rose 19% versus 2020 as all solar market segments posted unprecedented growth except for a slight decline in commercial. Utility PV, by far the largest industry driver, saw 17GW enter operation including 5.9GW in the fourth quarter.

For the third consecutive year, solar in 2021 led all technologies for new generating capacity in the US with a 46% share, up from 44% in 2020. Wind was second, 44% versus 38%, with natural gas at 10%, down from 17%.

Thanks to a strong year for utility PV, Texas overtook California as the top-ranked state for solar capacity additions with 6GW versus 3.7GW and Florida remaining third at 1.7GW.

Residential installations were 4.2GW as “consumer demand remains higher than ever”, analysts from both groups said in US Solar Market Insight 2021. New commercial capacity was 1.4GW and community 957MW.

Despite the sector’s impressive performance, it was lower than expected due to legislative uncertainty in Congress, logistics challenges, supply chain constraints, and trade headwinds.

As a result of these issues, a third of all utility-scale solar capacity scheduled for completion in Q4 2021 was delayed by at least a quarter and 13% of capacity slated for completion in 2022 has either been delayed by a year or more or cancelled outright.

WoodMac said it remains conservative about equipment supply availability for utility scale PV, forecasting 2022 new US capacity will decline 2GW to about 15GW.

“In the face of global supply uncertainty, we must ramp up clean energy production and eliminate our reliance on hostile nations for our energy needs,” said SEIA CEO Abigail Ross Hopper. “America’s energy independence relies on our ability to deploy solar, and the opportunity before us has never been more obvious or urgent.”

She called on Congress to pass a long-term extension of the federal solar investment tax credit (ITC) and provide incentives for investment in US clean energy manufacturing. “Policymakers have the answers right in front of them,” said Hopper, adding, “Our nation will be safer because of it.”

Under an ITC extension scenario, WoodMac forecasts over 10 years that residential, non-residential (commercial and community solar), and utility-scale solar sectors would increase by 20%, 15%, and 86%, respectively. Solar capacity additions by 2030 would exceed 70 GW annually.

Without policy action in Congress, it projects that US solar capacity would only reach 39% of what’s needed to hit President Biden’s 2035 decarbonization target for the electric power sector.

The industry remains hopeful that the numerous clean energy provisions included in the $1.8trn Build Back Better bill that is stalled as written in the Senate will make their way into revised or other legislation.

The report notes that 2021 saw increasing costs for the US industry. Year-over-year price increases for utility solar reached 18% for fixed-tilt projects and 14.2% for single-axis tracking projects in the fourth quarter.

Despite the near-term headwinds, WoodMac and SEIA expect the US to maintain at least 20GW of annual solar PV deployment in the “foreseeable future” as the transition to cleaner energy sources accelerates.