(Reuters) - New U.S. solar installations in 2018 will stay at the same level as last year due to weakness in several major residential markets and a slowdown in big projects after a rush to beat a tax credit deadline, according to a report released on Tuesday.
The zero-growth forecast came despite a 13 percent rise in the first quarter to 2.5 gigawatts, accounting for 55 percent of total U.S. generating capacity added, GTM Research said in the report commissioned by the Solar Energy Industries Association.
New solar installations, which surged for much of the last decade, fell almost 30 percent in 2017 to 10.8 gigawatts because developers in 2016 completed a slew of projects ahead of a scheduled expiration of a key tax credit that ultimately was extended, the report said.
Government policies that supported renewable energy and a sharp fall in the price of the technology propelled expansion.
GTM raised its forecast for utility-scale installations by 2 percent to 6.6 gigawatts, noting that many developers had secured panels before import tariffs were imposed by the Trump administration this year.
The tariffs will be felt mostly next year and beyond, GTM said, reducing its 2019 utility-scale forecast by 600 megawatts. This sector will grow about 5 percent in 2019, but will be flat in 2021 and 2022 due to tariff-related project delays, it added.
Module prices averaged 47 cents per watt during the first quarter, 24 percent above the 38 cents average a year ago, due to the U.S. tariffs.
The research firm ratcheted down its 2018 residential market outlook by 8 percent from 2.4 GW to 2.2 GW. Mature markets including Massachusetts, New York and New Jersey are expected to decline this year, GTM said.
Residential solar installations fell 15 percent last year but was flat during the first quarter, a promising sign of a market recovery after a 2017 pullback by national installers like Tesla Inc, it added.
Residential system prices have stagnated as the cost of acquiring customers has risen steadily over the last four quarters, GTM said.
Reporting by Nichola Groom; Editing by Cynthia Osterman and Richard Chang