Writing on the NPD Solarbuzz blog, senior analyst Michael Barker has predicted that the US photovoltaic (PV) market is set to reach a cumulative total of 20 GW by the end of 2014, thanks primarily to continuing declines in cost.
Barker notes that with the US grid reaching a cumulative total of 10 GW during 2013, the country is on course to double that by the end of the year.
In conjunction with declining costs, Barker also notes “a push by project developers to move projects towards completion before a reduction in the federal investment tax credit” as another reason for the growth in the US PV industry.
The growth, as backed by new research featured in the NPD Solarbuzz North America PV Markets Quarterly report, represents “a doubling of cumulative solar PV capacity within two years, with a compound annual growth rate (CAGR) above 50% since 2006.”
As the solar PV industry has matured it has not only become a highly sought after renewable energy, an alternative to the increasingly unattractive fossil fuel electricity sources, but it has also become a highly profitable investment. As a result, solar PV systems have been classed as a low-risk long-term revenue asset, making it increasingly attractive for installers and utility companies, as well as institutional investors and private owners and municipalities.
Barker notes, however, that “there are several risks that could affect solar PV growth in the US.
These include challenges at the state level to renewable portfolio standard (RPS) targets and net-metering programs, and the uncertainty related to the ongoing investigation into Chinese and Taiwanese PV components at the federal level.
If state-level policies were dramatically scaled-back, or the supply of PV modules was severely restricted, this could prompt a decline in demand or an increase in pricing.
Policy changes will inevitably take a while to filter through the appropriate bureaucratic channels, but any chance to trade cases could have a much quicker and wider impact, prompting a loss of investment confidence. Such lack of investor confidence has been the bane of the renewable energy industry in the UK, which has suffered from severe mixed signals from the government, affecting the industry at large, and causing the country to fall in rankings showing how attractive a country is for renewable energy investment. Nevertheless, the public and economic desire for a cleaner and more efficient electricity network is likely to continue to push solar PV investment for several years to come.
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