In this note, we review June satellite data as it relates to U.S. utility-scale solar projects. The biggest takeaway, in our view, has been the large number of projects that have started construction in recent weeks. In fact, roughly 2.5 GWac (30 GW annually) of new solar was started in June, suggesting that tracker demand can continue to grow despite mediocre new construction in early 2023 (and panel installations that have been lackluster in recent months). More takeaways from our June data are included below.
New construction up BIG
For June, we have identified 2.5 GWac of projects that started construction, up 50% compared to the trailing 12 month average. While last year June was also a great month, we had assumed 2022 was an outlier and were not expecting another 2.5+ GWac month of new construction this year (30+ GWac annualized); especially considering that interconnections are still running below 15 GWac annualized. For Q2 in total, new construction starts landed around 6 GWac, up 75% sequentially.
UTILITY SOLAR NEW CONSTRUCTION STARTS (graph below)
Texas back on top
Looking through the detail of new construction starts, Texas stood out this month. Until June, Texas had actually been a laggard in 2023 accounting for only 15% of the U.S. project starts (down from 20-30% in 2022). In June, almost 50% of projects that started construction were located in Texas. To put Texas into context, we are modeling the state to interconnect 6-8 GWac of solar over the next 12 months, contributing to 10-15% of ERCOT electricity generation by summer 2024.
Trackers tracking inline
For tracker construction, our data highlighted about 1.8 GWac of trackers being built during the month, roughly flat with May. Taken together with the rest of Q2, we count about 5.5 GWac of trackers were built during the quarter, up modestly from Q1 and up ~6% from a year go. Looking ahead, June new construction starts suggest that tracker demand can grow by another 5-10% sequentially in Q3’23.
Company market share unchanged
Of the 5.5 GWac of large projects that built trackers in Q2, our market share data suggests >80% of those were were built by either Nextracker, Array, or Gamechange. Between those companies, we DID NOT note any meaningful shifts to market share over the last few months.
Panel installations disappointing
While early stage construction (new starts / trackers) has been firm, late stage construction (panel installation / interconnections) have still been disappointing. Although late stage construction is much better than a year ago, the volumes are still well below the run rate for both new construction and tracker activity. To be more specific, we only counted about 4 GWac of panels that were installed and 3 GWac of projects that were interconnected during Q2, 30-50% below the run rate for new project work and tracker construction.
Under construction number UP again (approaching 40GWac in process)
With early stage construction strong but followed by lackluster interconnections, total under construction backlog continues to rise. In fact, we now count 38 GWac of U.S. large scale solar projects that are in some phase of the construction process. This is up 30% from last year and double what it was in 2021.
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