North American PV market at crossroads


In NPD Solarbuzz’s latest North America PV Markets Quarterly report, it was found that as grid parity approaches, photovoltaics is set to take a "significant market share from other energy sources". However, as president Craig Stevens points out, there are "enormous" challenges ahead in terms of both changing channel structures and business models.

Furthermore, a number of factors have come together, which have created a crossroads for the market, including high utility-scale project demand, falling solar incentives, a glut in modules and "significant" policy uncertainties.

Specifically, Solarbuzz said that the next four quarters will "carry significantly more downstream uncertainty than normal". This is mainly due to the petition submitted by SolarWorld to the U.S. government, which has been said to "split" the U.S. industry "with clear evidence that some Chinese manufacturers and project developers have already started to delay shipments and installations."

The end of the 1603 treasury grant program and decreasing module prices are also contributing to market uncertainty, and will slow 2012 growth down. Despite this, the research company believes that the market will triple by 2015.

Installation figures

In the fourth quarter (Q4) of 2011, the North American market is predicted to grow sequentially by 33 percent, and annually by 101 percent, to reach 800 megawatts (MW) of newly installed photovoltaic capacity. This, says Solarbuzz, will result in a total demand of more than 2.2 GW in 2011.

Looking at the U.S. photovoltaic market, the research company said it grew by 32 percent from Q2 2011, meaning that newly installed capacity could reach 1.9 GW by the end of 2011. "For large-scale non-residential and utility-scale projects in Q3’11 and Q4’11, the scheduled expiration of the US federal cash grant has encouraged progress to meet qualifying requirements; ongoing installation will continue throughout 2012, stimulated by the progress requirements for these cash grants," explained Solarbuzz.

The Canadian market, meanwhile, is forecast to grow sequentially by 35 percent, and annually by 33 percent. Under Ontario’s current FIT program, just 16 MW of photovoltaics has been installed; the majority is still being implemented under the provinces’ previous scheme. Unlike the U.S. market, which is driven by utility-scale installations, Canada represents predominantly residential systems. This is expected to remain so. "Expectations are that FIT rates will decline, but other aspects of the policy, such as local content requirements, will remain largely unchanged," added Solarbuzz.

Installation breakdown

Ground-mounted photovoltaic installations are set to comprise the lion’s share of the Q4 pipeline, at 38 percent, or 311 MW of the market. Meanwhile, building-mount, non-residential systems over 100 kilowatts (kW) in size will follow close behind, with 37 percent, or 301 MW. In third place, representing 15.2 percent, or 123 MW is the residential sector. Lastly, in fourth and fifth positions, are the building-mount, non-residential sector for systems under 100 kW and off-grid at 8.1 percent (66 MW) and 1.3 percent (10 MW), respectively.

Of this demand, the U.S. market is expected to comprise 84 percent. At 21 percent, California will represent the largest single market in Q4 2011, followed by Ontario, with 16 percent and New Jersey with 11 percent. "Demand in the United States market has spread to many states beyond California, but in Canada, Ontario is 99 percent of the national market, which creates significant policy risk," wrote Solarbuzz.

It goes on to say that while the Ontarian market has been driven chiefly by feed-in tariffs, the U.S. has employed a combination of policies and regulations at both state and federal levels. "By the end of Q3’11, the federal government cumulatively awarded over $1.4 billion in cash grants for solar systems, which is equivalent to 800 MW of installed capacity," it said.

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