US third quarter solar installations surged 46% from a year earlier to 3.8GW as the industry’s recovery accelerated from the worst Covid-19 business impacts led by record new utility capacity, according to the latest figures from Solar Energy Industries Association (SEIA) and consultancy Wood MacKenzie.

Large-scale PV projects accounted for 70% of installations as electric utilities overcame several months of market uncertainty brought on by Covid-19.

“The pandemic has no doubt created greater financial risk and precarious market conditions for developers, but the utility solar market has been able to weather these uncertainties so far and has continued to expand,” Solar Market Insight Q4 2020 report said.

Underpinning segment growth have been rising clean energy goals and mandates in some states, while a growing number of utilities are adopting lower carbon profiles in their generation portfolios for economic and environmental reasons, and/or in response to pressure from customers and shareholders.

Utilities have also ramped large solar power capacity with the federal investment tax credit (ITC) stepping down from 26% this year to a permanent 10% in 2022 and a robust corporate off-take market.

Cumulative new capacity through three quarters totaled 7.6GW, exceeding total annual additions except 2016 and 2019. Texas was the largest state market for new capacity with 2.4GW followed by Florida (2GW) and longtime leader California (1.8GW).

At least 9.5GW in new power purchase agreements were announced in the third quarter, bringing the contracted pipeline to a record total 69GW, according to the report.

The utility-scale project pipeline ballooned to a record 69.2 GW, and the US is now forecast to reach 100 GW of cumulative installed solar capacity by mid-2021.

Elsewhere, the non-residential and residential solar segments, hard-hit by coronavirus impacts showed encouraging signs of a rebound.

Non-residential installations were up 8% from the second quarter although still down 13% from third quarter 2019.

“The lifting of pandemic-related restrictions helped accelerate project completions but such restrictions complicated and delayed development timelines overall,” the report said, adding small and medium companies have expressed more hesitancy to procure renewable energy given uncertain market conditions.

The report noted non-residential continues to experience issues with availability of tax equity and competition to secure it has increased. Smaller projects with non-investment grade off-takers may have to wait until more financing is available in 2021, it said.

On the residential side, installations were up 14% from the second quarter when shelter-in-place orders caused the largest quarterly decline in the industry’s history in this segment. Activity was flat versus third quarter 2019.

The segment is improving where local authorities have eased restrictions on installation activity but labor supply remains an issue as Covid-19 spreads in the general population.

“This report points to the incredible resilience of our companies and workers in the face of the pandemic and continued demand for clean, affordable electricity sources,” said SEIA CEO Abigail Ross Hopper.

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US solar shrugs off Covid as big projects lead Q3 surge