The U.S. community solar market installed a record 1.7 GW of direct current (DC) capacity in 2024, a 35% increase from 2023. However, due to political uncertainty at both the national and state levels, long-term growth is at risk. 6r36p

According to a new report published by Wood Mackenzie in collaboration with the Coalition for Community Solar Access (CCSA), last year’s growth was led by New York, Maine, and Illinois. These three states set annual records and ed for 83% of the national volumes. The total accumulated community solar installations now amount to 8.6 GW of DC.

Caitlin Connelly, research analyst and lead author of the report, pointed out, “The activity in 2024 was impressive, resulting in our strongest year yet in of community solar growth.” She added, “However, despite the impressive installation volumes in 2024, the main state markets are quickly becoming saturated and will not be able to sustain the same growth levels long-term. Additionally, emerging markets have been slow to ramp up their activity, and program size limits restrict growth potential in these states to offset declines in the larger markets.”

According to Wood Mackenzie, national community solar growth is expected to contract by an average of 8% annually through 2029, ultimately reaching over 15 GW of accumulated community solar capacity. However, depending on how policy changes and interconnection reforms materialize, growth prospects could vary widely.

“Although the new U.S. istration has fueled significant uncertainty in the U.S. solar sector, the measures taken so far have led to minimal changes in our baseline forecast,” Connelly said.

“However, in an extreme downturn scenario, our five-year forecast contracts by 40% compared to the baseline scenario. On the contrary, the current federal situation and rapid improvements in state policies and interconnection conditions result in a high scenario that is 37% above the baseline forecast.”

Potential new state markets for community solar 625pc

According to forecasts, new state markets that have proposed legislation for community solar programs could drive the sector forward.

In the past year, legislation in Pennsylvania, Ohio, Missouri, Iowa, Georgia, Washington, and Wisconsin has progressed more than ever, indicating strong bipartisan and the potential for new market expansion.

Community solar is also being incorporated into major state energy plans, such as Pennsylvania’s Lightning Energy Plan, which strengthens its value to lawmakers and regulators. If everything goes as planned, new state community solar markets could boost the base case forecast by at least 16% for 2029.

Community solar capacity serving low- to moderate-income (LMI) subscribers is concentrated in New York and Massachusetts. The two states combined for 49% of the 1 GW of DC community solar capacity serving LMI, highlighting the continued reliance on state and federal incentives to drive LMI capacity. In total, LMI subscribers represent 14% of the total deployed community solar capacity.

Stricter LMI subscriber requirements in emerging state markets will result in LMI capacity representing nearly 18% of total community solar capacity by 2026. Federal uncertainty regarding the LMI Communities supplement and Solar for All funding could potentially limit long-term growth in LMI capacity.

Dominant players in the market: developers and asset owners 3y2660

The top five community solar installers secured 19% of the market in 2024, down from 25% in 2023. The competitive landscape for asset owners is significantly more exclusive, dominant, and region-specific than that of community solar installers. The top 10 community solar asset owners secured 54% of the installed capacity in 2024 and 40% of the accumulated capacity. Major asset owners include Nexamp, AES Clean Energy, and Nautilus Solar.