The 2011 U.S. Solar Market Insight Report was released yesterday by the Solar Energy Industries Association (SEIA) and GTM Research. Let’s run down some of the key findings, using several of the reports wonderful charts, of course.
1. Record Year! (Big Time!)
From SEIA: “The U.S. solar energy industry installed a record 1,855 megawatts (MW) of photovoltaic (PV) capacity in 2011, more than doubling the previous annual record of 887 MW set in 2010, according to the latest U.S. Solar Market Insight report. The record amount of solar installations is enough to power more than 370,000 homes, and represents a 109 percent growth rate in 2011. It is the first time the U.S. solar market has topped one gigawatt (1,000 MW) in a single year. In the fourth quarter of 2011 alone, the industry installed 755 MW, up 115 percent from Q4 2010, for a second consecutive record-breaking quarter. GTM Research and the Solar Energy Industries Association (SEIA®) estimate the U.S. solar market’s total value surpassed $8.4 billion in 2011.”
Of course, while this is record-shattering, it’s also what SEIA has been predicting for years, showing that, so far, SEIA has not been overly optimistic about the tremendous growth it sees coming solar’s way.
2. CA & NJ Leading the Way.
The top states continue to be California and New Jersey, followed by Arizona, New Mexico, Colorado, and Pennsylvania. Thought, it’s likely New Jersey and Pennsylvania won’t be so high on the list next year, as discussed more in Ernst & Young’s recent U.S. renewable energy attractiveness index.
You may have noticed in the chart above that residential solar power is the sector that grew the least in the past year. This is something I’m going to come back to in a future post — it is markedly different than how solar has grown in world-leading Germany and Italy.
As GTM writes: “The utility market grew 185 percent in 2011 to reach 758 megawatts, accounting for 41 percent of all installations in 2011. There are over 9,000 megawatts of projects with signed utility PPAs in the pipeline, and over 3,000 megawatts currently in construction.”
3. Global Market Share Grows.
With its tremendous growth, the U.S. share of the global solar PV market also grew considerably. From SEIA: “After a recording-breaking 2011, the U.S. has proved itself as a viable market for solar on a global scale. In 2011, the U.S. market’s share of global PV installations rose from 5% to 7% and should continue to grow. We forecast U.S. market share to increase steadily over the next five years, ultimately reaching nearly 15% in 2016 – at which point we anticipate the U.S. and China to be the leading markets in the world as European markets slow down. Given that solar installations in the U.S. have more than doubled in each of the past two years, and that the current project pipeline far exceeds current installation levels, this is a highly probable outcome.” This is in-line with Ernst & Young’s recent global renewable energy attractive index, which put the U.S. at #2, overall, and #1 in the solar index ranking (by far).
4. Dropping Solar Panel Prices Not the Only Thing Driving Growth.
The U.S. solar market grew a ton for numerous reasons, not just the tremendous drop in solar panel prices (but that was clearly one important factor).
SEIA notes: “This unprecedented growth was spurred in part by declining installed solar photovoltaic (PV) system prices, which fell 20 percent last year on the back of lower component costs, improved installation efficiency, expanded financing options, and a shift toward larger systems nationwide. In addition, the anticipated expiration of the U.S. government’s 1603 Treasury Program, which ended Dec. 31, 2011, drove developers to commission projects before the end of the year.”
GTM adds: “Average PV module prices in the fourth quarter of 2011 fell to $1.15 per watt, down 40 percent from the same quarter a year earlier. These precipitous price declines were a boon to installers, but created an extraordinarily difficult year for manufacturers.”
5. CSP Will Have Its Day in the Sun.
While 2011 didn’t exactly show it, CSP is coming in the U.S., alongside continued growth of solar PV. (And don’t forget that the CSP Alliance was just formed to champion that option forward.) From SEIA:
The report also provides an update on the concentrating solar power (CSP) market. While no new concentrating solar thermal electric capacity was brought online in 2011, a total of 10 concentrating photovoltaic projects came online. The year also saw meaningful construction progress on a number of projects with some capacity expected to come online later in 2012 and a surge in 2013. Today, more than 1,000 MW of CSP are under construction, enough to power 200,000 homes.
As of year-end 2011, cumulative PV capacity in the U.S. reached nearly 4,000 MW and cumulative CSP capacity topped 500 MW. Together this represents enough solar capacity to power nearly a million households.
6. U.S. Solar Manufacturing Declined.
Even in the midst of rapid solar power growth, U.S. solar manufacturing declined due to global oversupply and solar panel, solar cell, and solar wafer prices declining in China. (Hence, the ongoing solar trade dispute.)
7. 2012 Expected to be Big.
The U.S. Solar Market Insight report projects that 2012 will be another booming year for U.S. solar, as well the several years following 2012. 2,800 MW of solar PV are expected to be installed in 2012. After that, a compound annual growth rate of 30 percent through 2016 is expected.
“The solar industry is the fastest growing industry in America for the second year in a row. What we are seeing in the U.S. is that policies are working to open new markets and remove barriers for solar,” said Rhone Resch, president and CEO of SEIA. “The industry is now poised for years of multi-gigawatt growth and the creation of tens of thousands of new jobs. But we face a number of challenges that have the potential to slow this growth. That is why SEIA now coordinating the industry’s federal and state policy initiatives to present a unified, cohesive voice for the solar industry.”
And, if all of that wasn’t summarized enough for you, here as even more summarized list of some of the key stats, from SEIA:
- PV installations grew 109 percent in 2011 to reach 1,855 MW, which represents 7 percent of all PV globally, up from 887 MW and 5 percent of global installations in 2010.
- Cumulative PV capacity operating in the U.S. now stands at 3,954 MW.
- There were 28 individual PV projects over 10 MW completed in 2011, up from only two in 2009.
- Eight states installed over 50 MW each in 2011.
- Installation totals in 2011 increased in 18 of the 23 states covered in detail.
- Weighted average PV system prices fell 20 percent in 2011 as a combined result of lower component prices, improved installation efficiency, and a shift toward larger systems.
- There were over 61,000 individual PV systems installed in the U.S. in 2011, bringing the total number of operating systems in the U.S. to more than 214,000.
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