US solar market to install 2.8 GW in 2012 on back of "historic" 201115. March 2012 | Applications & Installations, Global PV markets, Markets & Trends | By: Becky Stuart
Having achieved a "historic" year in terms of photovoltaic installations in 2011, the U.S. solar market is estimated to be worth over US$8.4 billion. Declining system prices and improved financing options were said to be among the key growth drivers. Going forward, 2012 is predicted to be a another strong year, with 2.8 GW of installations expected.
In 2011, the U.S. installed a "record" 1.85 gigawatts (GW) worth of photovoltaics, compared to 887 megawatts (MW) in 2010, according to a report from the Solar Energy Industries Association (SEIA) and GTM Research, titled "US solar market insight". This, they point out, is the first time the country has topped a gigawatt in a single year. Of this total figure, 755 MW was added to the grid in the fourth quarter (Q4) alone. Consequently, cumulative installed photovoltaic capacity is said to be 3.94 GW.
"The record amount of solar installations is enough to power more than 370,000 homes, and represents a 109 percent growth rate in 2011," said SEIA in a statement released. Furthermore, domestic diversification continued, with eight states installing more than 50 MW each, up from five in 2010; and 28 projects were said to be over 10 MW in size, compared to just two in 2009.
Broken down, 61,000 individual photovoltaic systems installed in the country last year, thus bringing the total number of operating systems in the U.S. to more than 214,000, said SEIA and GTM.
800 MW of the 1.85 GW was installed in the commercial sector, 758 MW in the utility sector, and 297 MW in the residential sector. As before, the Californian and New Jersey markets led the way. "Utility-scale project installations, primarily across states in the Southwest, nearly tripled 2010 totals. In the residential sector, California installed 114 MW, with New Jersey, Arizona, Hawaii, Pennsylvania and Colorado each contributing meaningfully to the residential total," explained SEIA.
State by state
According to the research, California was the top solar state, having installed 542 MW in 2011, followed by New Jersey (313 MW), Arizona (273 MW), New Mexico (116 MW), Colorado (91 MW), Pennsylvania (88 MW), New York (60 MW), North Carolina (55 MW), Texas (47 MW) and Nevada (44 MW).
Project finance investments were said to have reached an "all time high", with traditional energy companies like MidAmerican, Excelon and NRG Energy becoming equity investors in large-scale projects. Not all was positive, however, noted SEIA and GTM, particularly due to the expiration of the 1603 treasury grant program, which has complicated the financing of many new solar projects.
Installation prices were found to have fallen by 7.5 percent between Q3 and Q4 of 2011, from US$4.41 per Watt (/W) to $4.08/W. Over 2011, average installed costs fell by 20 percent. This was said to be "heavily impacted" by the large volume of utility-scale projects.
Broken down, residential system prices were said to have increased by 0.7 percent between Q3 and Q4 2011, as the national average rose from $6.14/W to $6.16/W. However, year-over-year (YoY) costs saw a decline of 3.6 percent. Non-residential system prices, meanwhile, decreased just 0.4 percent quarter on quarter, from $4.94/W to $4.92/W. For YoY costs, a decline of 13.9 percent was seen. For the utility sector, prices fell from $3.45/W in Q3 2011, to $3.20/W in Q4, and YoY saw costs declining by a significant 21 percent.
In terms of manufacturing, SEIA and GTM said that while many manufacturers were forced to close their doors in 2011, including Solyndra, Evergreen and SpectraWatt, due to the challenging 2011 market conditions, U.S. module manufacturing still managed to expand by 28 percent. Production was said to have remained "flat", however.
Overall, the U.S. produced 40,658 MT of polysilicon, 384 MW of wafers, 969 MW of cells, 1.21 GW of modules and 1.65 GW of inverters in 2011. "In sharp contrast to 2010, which saw 100 percent growth in production across the PV value chain, 2011 saw production stay mostly flat for polysilicon and modules, and shrink significantly in the case of wafers and cells," said the companies.
They added, "In terms of technology trends, the dominant majority of modules produced in the U.S. in 2011 were crystalline silicon (68 percent) and cadmium telluride (23 percent), with small amounts of CIGS (seven percent) and amorphous Si (one percent). Overall U.S. thin film production share stood at 32 percent, but this is expected to increase over the course of 2012 and 2013 as numerous thin film facilities come on-line and ramp up production."
With regard to the U.S.-China trade dispute, SEIA and GTM said it is "unreasonable to expect all (or even most) solar manufacturing to come from the U.S." They continued, "The solar industry is global, and consequently subject to the same economic forces as manufacturing in other sectors."
Myriad of factors
SEIA and GTM attributed the success of the U.S. solar market to a myriad of factors, including lower system prices, improved installation efficiency, a move towards large-systems and better financing. The end of the 1603 treasury grant program was also a crucial factor, particularly in driving up fourth quarter installation rates.
This year, SEIA and GTM expect 2.8 GW to be added to the U.S. grid. "Beyond 2012, the report forecasts installations to continue their ascendancy at a compound annual growth rate of 30 percent through 2016," added SEIA in its statement.
In related news, through a recent study on the U.S. photovoltaic market, EuPD Research found that in 2011, Californian solar installers "clearly" preferred to buy photovoltaic modules from specialized wholesalers.
"Among Californian installers in 2011, the indirect purchase of solar modules via wholesalers clearly dominated," said EuPD in a statement released. It added that two thirds of the solar companies it questioned favored this purchasing method, while 80 percent said they used specialized photovoltaic wholesalers.
For inverters, the situation was similar, said EuPD, with approximately 70 percent of the surveyed installers preferred to purchase via wholesalers. Among this group, it said, around nine out of 10 installers chose to buy their inverters from specialized wholesalers.
"Thus, the figures for Californian installers purchasing modules indirectly lie slightly under the average for the five most significant U.S. photovoltaic markets – New Jersey, Colorado, Pennsylvania, Arizona and California. However, the purchasing habits of installers in these five states tend to vary greatly," concluded the research company.
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