According to a report released on September 14, 2021, by Wood Mackenzie and the Solar Energy Industries Association (SEIA), the price of solar energy increased in every market in the second quarter of 2021.[1] This is the first time solar prices have increased quarter-over-quarter and year-over-year since SEIA and Wood Mackenzie began tracking this data in 2014. Prices for utility-scale solar energy have increased the most, rising 6% in the second quarter of 2021 compared to the second quarter of 2020. The report found that major drivers of the increase include supply chain constraints, increased shipping costs, and rising prices for commodities like steel. The report said that recent enforcement actions on Xinjiang metallurgical grade silicon and two new tariff petitions could significantly exacerbate supply chain constraints and increase solar system prices. The report forecasts that prices will likely remain elevated throughout 2021 but should decrease sometime in 2022.

Despite rising prices, the solar industry accounted for 56% of all new U.S. electric capacity additions in the first half of 2021. The U.S. officially surpassed 3 million solar installations in the second quarter of 2021, which was driven by a strong recovery in the residential sector after it was impacted by the COVID-19 pandemic. Wood Mackenzie forecasts that the U.S. will average just over 29 GW of new annual solar capacity additions through 2026 but noted that this falls short of the pace necessary to reach President Biden’s 2035 clean energy targets.

[1] https://www.seia.org/news/solar-prices-increase-across-every-market-segment-first-time-seven-years