The Solar Energy Industries Association (SEIA) and GTM Research got together and hosted an excellent information session via Google Hangout this morning. The hangout reviewed the results of their report released today — The U.S. Solar Market Insight Report: Year In Review. It also delved into the outlook for the U.S. solar market and industry going forward. Joining them was industry player Arno Harris, CEO of Recurrent Energy.
The U.S. solar market continued to fire on all cylinders, so to speak, in 2012 despite internal turmoil; the fragility of economic recovery in major economies around the world; and ongoing, well-funded opposition to pro-solar and pro-renewable energy policies and programs at the state, federal, and local levels — opposition funded by the largest fossil fuel companies and electric utilities, according to panel members.
Now the fastest growing source of electricity generation in the U.S., installed solar power capacity surged 76% higher in 2012 compared to 2011. Total U.S. solar power generation capacity reached 7.7 gigawatts (GW) — 3.3 GW added last year alone — enough clean, renewable electricity for 1.2 million average American households. That’s just one of the substantial benefits of ongoing growth and development of the U.S. solar energy market and industries, however.
Read on to get the skinny (a summary of key takeaways) from today’s SEIA/GTM Google Hangout.
Transition, Transformation, Growth, & Coming of Age: U.S. Solar Energy in 2012
Momentum, transition, transformation, maturity, and diversification were keywords in panel members’ recap of events and developments in the U.S. solar market and industry in 2012. Also figuring prominently in the discussion were the cross-cutting and substantial returns, benefits, and advantages growing acceptance and adoption of solar energy systems being realized across the U.S. geographically; across market segments – at residential, commercial and industrial, and utility scales – among investors large and small; among legislators at the local, state, and federal levels; and, more broadly speaking, among the U.S. populace.
SEIA CEO and president Rhone Resch emphasized the importance of “smart” federal, state, and local government support in fueling recurring gains. He also emphasized these policies’ importance in terms of the hundreds of thousands of green jobs that have been created, the tens of millions of dollars added to state treasuries and local economies, and the far-reaching environmental and geopolitical ramifications that growing solar energy use has for Americans in terms of energy independence and energy security.
Resch also highlighted the staunch opposition to ongoing (let alone stronger and more consistent) government support for solar and renewable energy, as well as the desire on the part of fossil fuel industry players and big utilities in parts of the country to roll back or eliminate government support programs, such as the federal investment tax credit (it’s due to expire come 2017) and state Renewable Portfolio Standards (RPS).
Fossil fuel and utility opposition to recently enacted net metering policies and bullying of state public utility commissions (PUCs) were noted as “hot button” political issues, examples of how big utilities and fossil fuel industries are working behind the scenes to maintain their privileged position in a highly regulated, monopolistic U.S. power market.
Driven by self-preservation and resistance to change, utility and fossil fuel industry efforts to roll back the solar and renewable tide and thwart threats to an “antiquated” energy market system, infrastructure, and business model actually hinder and weaken (rather than foster and strengthen) the capacity of the U.S. in terms of energy independence and energy security, as well as economic and climate change resiliency.
Such resistance and opposition limits the US’ ability to respond to the defining challenges of our times, panel members emphasized, which seem to boil down to the question of how to generate economic growth in socially and environmentally sustainable ways in an increasingly globalized economic system.
Solar energy is the fastest growing source of electricity in the U.S. and one of the fastest growing industry of any type, according to Resch. More than 120,000 Americans are now employed in the U.S. solar industry. Some 16 million solar panels were installed in the country in 2012 — some 2.2 per second — “each one bolted down by an American worker,” he said.
The momentum driving gains in U.S. solar energy was evident in the increasingly broad geographic scope and scale of solar energy installations, supply chain partners, and business capabilities, Resch and GTM Research’s Shayne Kann highlighted.
More than 12 states saw 50 megawatts (MW) or more of newly installed solar power capacity in 2012. That compares to just 5 states as recently as 2010. State-level policy actions, along with ongoing cost reductions, technological innovations, financial innovation, and greater access to financing and investment vehicles have opened up new market opportunities at a breakneck pace.
Back in 2010, California’s solar energy market was effectively the national market, accounting for more than 90% of solar power installations. Given its geographic, climate, and socioeconomic attributes, California continues to be a driving force in U.S. solar energy growth, but a growing number of states across the country, such as New Jersey, Arizona, Hawaii, and Texas, as well as New York, Ohio, Pennsylvania and others, are making growing contributions.
Notable in this regard was the emergence in 2012 of North Carolina, not only as a center of solar energy manufacturing and R&D, but in terms of solar power installations.
Recurrent Energy’s success was indicative of, and contributed to, overall solar energy market growth and industry success in 2012. Recurrent managed to bring 140 MW of solar power capacity into operation last year.
“A major milestone,” according CEO Arno Harris, Recurrent has raised over $2 billion in project finance to date and expects an even bigger 2013. With a 300 MW project pipeline, “you can take the numbers we’re seeing and multiply that across the industry to get to the numbers like we’re seeing in this report.”
Utility-scale solar power projects and installations have been the primary drivers of development and growth of the U.S. solar power market and industry. State RPS (aka Renewable Energy Standards) have been instrumental in driving consistently rapid growth in large, utility-scale solar power installations.
Though there’s something of a lull in new procurement at the moment, GTM’s Kann and other panel members see it as just that, a temporary lull. The large majority of U.S. utilities have yet to sign a solar power purchase agreement or launch a utility-scale project, it was noted.
A clear sign that solar energy is moving into the mainstream, growth has been even faster when it comes to distributed solar power generation at the residential, commercial, and industrial scales, however. The primary driver has been the extraordinarily rapid decline in solar PV panel and module costs, which have fallen some 60% since the beginning of 2011, with installed costs dropping 27%, panel members noted.
Innovative residential and retail solar energy financing programs and business models – third-party solar leases and power purchase agreements (PPAs) – are driving big gains in small- and medium-scale residential, commercial, and industrial solar photovoltaic (PV) installations. Visible on the horizon are the institution of solar and renewable energy versions of tax-advantaged investment vehicles – real estate investment trusts (REITs) and master limited partnerships (MLPs).
Community-owned solar power installations are also on the rise, further facilitating market access to small and local investors access to the US. Though it’s too early to tell, the advent of solar crowdfunding platforms and businesses, such as Solar Mosaic, also hold promise, according to panel members.
A last highlight brought up by Resch: recognizing the tremendous promise investing in solar and renewable energy holds for addressing our most challenging problems, more than 90% of Americans have consistently expressed their support for fueling ongoing gains.
It’s time for the elected representatives of the American people to acknowledge and respond to this by enacting strong, clear, and consistent pro-solar and pro-renewable energy policies and programs, support on par with those that continue to be granted to the fossil fuel industry.
Break for now. We’ll be back with more on SEIA and GTM’s 2012 Solar Market Insight and the outlook for U.S. solar energy down the line. If you can’t wait, check out SEIA’s 2012 SMI information resources.