Community solar installations in the U.S. have displayed a downward trend, with a 6% decrease reported in 2022 and a 13% decline during the first quarter of 2023, according to a report jointly published by Wood Mackenzie and the Coalition for Community Solar Access (CCSA).

The decline in numbers was mainly caused by uncertainties in the supply chain over the past year and challenges related to interconnection and siting, which hindered growth in important state markets like Massachusetts and Maine.

However, the report suggests optimism that community solar growth will rebound, starting in 2024 and continuing over the next five years. The sector is on the brink of surpassing 6 GW in 2023.

Wood Mackenzie’s projections indicate that established markets will expand by an average of 8% annually, and this growth is expected to result in a cumulative capacity of nearly 14 GW by 2028.

It is important to note that this projection doesn’t include the potential impact of new programs, which could lead to even greater growth.

Caitlin Connelly, a research analyst at Wood Mackenzie, stated that the projected growth in the near term is propelled by the ongoing success of programs in New York and Illinois and positive policy updates in Maryland, Minnesota, and New Jersey.

Additionally, California’s newly proposed program could potentially contribute to 20% of Wood Mackenzie’s national projections from 2024 to 2028.

Regarding the Inflation Reduction Act (IRA), recent guidance from the U.S. Internal Revenue Service concerning investment tax credit bonus adders indicates that qualifying for multiple adders will be challenging.

The report suggests that community solar developers will likely prioritize qualifying for the low-income community adder among the three available.

The $27 billion Greenhouse Gas Reduction Fund (GGRF) presents fresh opportunities for community solar.

The U.S. Environmental Protection Agency’s ‘Solar for All’ fund within the GGRF is particularly advantageous for community solar, offering up to $7 billion to support establishing and expanding community solar programs, focusing on aiding low-income communities.

Matt Hargarten, VP of Campaigns at CCSA, noted that community solar’s growth trajectory remains promising, with capacity projected to more than double over the next five years in existing state markets alone.

Hargarten emphasized that these projections don’t account for potential new states enacting community solar laws and the substantial federal grants expected to be allocated to states to enhance community solar access.

Hargarten emphasized the potential for substantial growth if regulators and legislators continue to support the initiative.

According to U.S. Solar Market Insight Q2 2023, released jointly by the Solar Energy Industries Association (SEIA) and Wood Mackenzie, the solar installations in the U.S. grew 47% year-over-year to 6.1 GW during the first quarter of 2023, recording the best initial quarter for the country’s solar sector in terms of new installations.