Solar Tribune

U.S. solar industry grew by 109% in 2011


According to a March 14 report, the PV installations increased to a record 1,855 MW of capacity in 2011, up from 887 MW the previous year.

The U.S. Solar Market Insight: Year-in-Review 2011 report, from the Solar Energy Industries Association (SEIA) and GTM Research, found that the U.S. solar industry grew by 109 percent from 2010 to 2011.

The U.S. market now makes up seven percent of PV globally, with a total value of over $8.4 billion in 2011. Last year’s installations represent enough installed capacity to power over 370,000 homes, bringing the cumulative solar capacity in the U.S. to a level enough to power almost a million homes.

GTM Research and SEIA attribute the record growth to the following factors:

  • lower installed PV system costs: costs dropped by 20 percent in 2011 due to lower component costs, improved installation efficiency, expanded financing options, and a shift toward larger systems nationwide
  • the expiration of the 1603 Treasury Program, which pushed project finalization before the Dec 31, 2011 expiration deadline
  • more utility-scale projects were completed in 2011 than ever before

“In 2011, the market demonstrated why the U.S. is becoming a center of attention for global solar,” said Shayle Kann, Managing Director of GTM Research’s solar practice.

“It was the first year with meaningful volumes of large-scale PV installations; there were 28 individual PV projects over 10 megawatts in 2011, up from only two in 2009. Furthermore, the market continued to diversify nationally; eight states installed more than 50 megawatts of solar each last year, compared to just five in 2010. These are all indicators of a vibrant market.”

U.S. installations and global market share to 2016. Credit: SEIA and GTM Research

But the report also highlighted problem areas in the U.S. market, including the impact of the expiration of 1603 Treasury and falling prices – with solar panel prices dropping over 50 percent during the year – on PV firms.

“As a result [of lower panel prices], multiple U.S. module manufacturing plants closed over the course of 2011. Despite these closures, U.S. module manufacturing capacity expanded 28% and production remained flat for the year when compared to 2010,” said the report.

Looking Ahead

SEIA and GTM Research are nevertheless positive about 2012, in part because of the many projects in the pipeline as part of the Section 1603 Treasury Program, most of which will be completed in 2012.

But the report notes that “2012 market size will still be largely determined by factors that have not yet been decided, such as the final outcome of the trade petition and market dynamics in Germany and Italy.”

The analysis also predicts that U.S. market share will increase over the next five years to almost 15 percent in 2016, when U.S. and China will be the leading markets as European markets slow down.

Regarding the political scrutiny surrounding the Solyndra bankruptcy, the report said “an industry blessed with overwhelming public support suddenly became a target for those who sought to admonish the loan guarantee program or clean energy policy in general.”

But SEIA and GTM Research still believe that the government support of the solar industry has been a success.

The report also addresses the brewing trade dispute with China spearheaded by SolarWorld, who filed a petition for tariffs to be applied to Chinese PV imports. “[I]t would be unreasonable to expect all (or even most) solar manufacturing to come from the U.S.,” the report said.

“The U.S. certainly has a role to play, but it will be over the next decade that the nature of that role will be determined. As the industry continues to mature, successful and sustainable companies will be separated from hopeful but ultimately unsuccessful ventures.”

Read the full report here.

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