Clean Tech Trends: Solar’s Banner Year
Last month Solar had exciting fanfare with the USSMI report announcing that the solar industry was the fastest growing industry in America for the second year in a row!
Solar more than doubled in the U.S. in 2011 with growth of 109% in the number of PV installations, reaching 1,855 MW up from 887 MW in 2010. Twenty-eight individual PV projects of over 10 MW were completed in 2011, a marked rise from only two in 2009.
Rhone Resch, president and CEO of the Solar Energy Industries Association® (SEIA®) attributes growth in the U.S. solar industry to policies that are working to open new markets and remove barriers for solar. He stated that “The industry is now poised for years of multi-gigawatt growth and the creation of tens of thousands of new jobs.”
The number of individual PV systems installed in the U.S. in 2011 rose to 61,000, making a grand total of more than 214,000 operating systems in the U.S.
U.S. growth in demand coincides with challenges panel makers face to earn a profit in the face of huge supply and weakened margins. The WilderHill Clean Energy Index .ECO fell by approximately 49% last year, but have gained back about 12% this year.
The USSMI report reflects the U.S. market share of PV installations rose from 5% to 7% in 2011; it forecasts U.S. market share to continue to increase and reach nearly 15% in 2016.
California and New Jersey were the biggest leaders. California installed 542 megawatts, a whopping 29% of all installations nationally. 2011 saw nearly 200 MW in utility-scale installations, and over 150 MW in residential capacity online by Q3 2011.
New Jersey seconded at 313 MW. Overbuilding in in residential and commercial solar capacity will dampen growth however in the coming years. Legislation to boost Solar Renewable Energy Certificates prices may stabilize the local industry.
“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,” stated Rhone Resch, president and CEO of SEIA.
The policy tools put in place to help finance the industry led to the doubling of solar installations last year, and the U.S. retook its leadership position in renewable energy investment, a position previously lost to China in 20009.
The ARRA Section 1603 Grants in Lieu of Tax Credits for Renewable Energy expired at the end of 2011. Numerous projects were grandfathered in and those should keep the solar economy busy through 2012. Given the meandering pace of economic recovery, it is not sure that tax equity financing will be plentiful by 2013 at which point project finance may become more challenging.
Polysilicon prices collapsed in 2011 due to oversupply, a trend that may continue through 2012 according to GTM Research. This likely will cause market consolidation in the sector.
The U.S. ranked second on the E&Y Country Attractiveness Indices for renewable energy in 2011. “Early indications for 2012 are that it will be more challenging for stakeholders, with mature markets getting softer due to continued liquidity constraints and the ongoing withdrawal of government incentives,” Gil Forer, Ernst & Young’s Global Cleantech Leader, says.
So with the changing landscape, expect new technology and new entrants to further shake up the industry over the next few years. Keep your eye on Ampulse Corporation & the National Renewable Energy Laboratory less expensive alternative to wafer-based crystalline silicon solar cells. Watch for Twin Creeks’ new tools to technology to change silicon solar photovoltaics (PV) manufacturing processes. Watch for the next triumphs of the solar industry!
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