The U.S. added 4.6 GW of new solar capacity in the third quarter, a 17% decrease from the same quarter last year. 

Trade barriers and ongoing supply chain constraints were blamed for slowing America’s clean energy progress. The disruptions are expected to cause a 23% decline in solar installations this year compared to 2021. The findings are part of the U.S. Solar Market Insight Q4 2022 report released by the Solar Energy Industries Association (SEIA) and Wood Mackenzie.

Utility-scale solar installations reached 2.5 GW, a 36% decrease over the same quarter last year, the report said. There were 340 MW of commercial solar installed, up 3% year-over-year and down 10% quarter-over-quarter. Community solar developers installed 212 MW, down 17% both year-over-year and quarter-over-quarter.

Total 2022 installations are expected to land at 18.6 GW, which the report’s authors said would be a slight increase from their previous outlook.

Detainments of solar equipment under the Uyghur Forced Labor Prevention Act (UFLPA) are depressing near-term solar installation forecasts and delaying the impact of the Inflation Reduction Act (IRA), the report said. The U.S. Department of Commerce’s recent preliminary decision to apply anti-circumvention tariffs on solar products from a handful of companies presents downside risk to future solar deployment, it said.

“America’s clean energy economy hindered by its own trade actions,” said SEIA president and CEO Abigail Ross Hopper. She said the solar and storage industry is “acting decisively” to build an ethical supply chain. She said that “unnecessary supply bottlenecks and trade restrictions are preventing manufacturers from getting the equipment they need to invest in U.S. facilities.” 

She said that in the aftermath of the IRA, “we cannot afford to waste time tinkering with trade laws as the climate threat looms.”

In a preliminary finding issued December 1, the Enforcement and Compliance arm of the International Trade Administration found that imports of certain crystalline silicon photovoltaic cells, whether or not assembled into modules (solar cells and modules), that were exported from Cambodia, Malaysia, Thailand, or Vietnam using parts and components produced in China are circumventing the antidumping duty (AD) and countervailing duty (CVD) orders on solar cells and modules from China.

The preliminary decision applies to the Thailand operations of Canadian Solar and Trina Solar, as well as BYD Cambodia and Vina Solar Vietnam. Other companies also under investigation — New East Solar Cambodia, Hanwha Q CELLS Malaysia, Jinko Solar Malaysia and the Vietnam operations of Boviet Solar — were found not to be violating AD/CVD rules.

In June, President Joe Biden granted some relief by pausing any new tariffs on modules imported from Southeast Asia for two years. The reprieve came after a $5 million pressure campaign from groups including SEIA that urged the president to step in.

Ross Hopper said that while President Biden “was wise” earlier this year to provide a two-year window before any tariff implementation, “that window is quickly closing.” She said that two years is “simply not enough time to establish manufacturing supply chains” to meet U.S. solar demand.

But since the IRA was signed into law this fall, multiple companies have announced plans worth billions of dollars to invest in solar module manufacturing capacity in the U.S. Many cited the policy certainty afforded by the federal legislation as offering an environment ripe for new investment.

For example, in mid-November First Solar said it planned to build its $1.1 billion, 3.5 GWdc factory in Alabama, its fourth U.S. photovoltaic (PV) solar module manufacturing facility. In making the announcement, Mark Widmar, CEO, said, “The passage of the Inflation Reduction Act of 2022 has firmly placed America on the path to a sustainable energy future.”

And in late October, North American solar module manufacturer Heliene opened an expanded facility in Minnesota, which now boasts more than 500 MW of total annual capacity. The $21 million project increased the facility’s total annual capacity from 150 MW to 570 MW.

Credible evidence has circulated since 2020 that ethnic Uyghurs living in the Xinjiang region of China are being forced to work in extracting and refining raw materials that go into the production of polysilicon which then is used to produce solar cells and modules. Enforcing a federal law that was passed a year ago, U.S. Customs and Border Protection officials reportedly targeted some 838 entries valued at more than $266.5 million as recently as August.

The solar market report said that as a result of supply constraints, the utility-scale, commercial and community solar markets all experienced quarter-over-quarter declines in the thiurd quarter. The residential solar segment was less directly impacted by trade issues and saw 1.57 GW of new installations, a 43% increase over Q3 2021.

Forecasts from Wood Mackenzie find that the UFLPA will limit solar deployment through 2023 and mute the impact of the IRA in the near term. 

The report forecasts the utility-scale solar market to add 10.3 GW of new capacity in 2022, a 40% drop from 2021 volumes. By 2024, IRA-fueled growth is expected to begin in earnest, with annual solar growth averaging 21% between 2023-2027.

Even as supply chain constraints slowed the market, solar accounted for 45% of all new electric generating capacity additions through Q3 2022, the most of any electricity source.