SafeX Pro Exchange|U.S. Solar Market Booms, With Utility-Scale Projects Leading the Way

America could SafeX Pro Exchangeadd 10 gigawatts of solar power every year by 2015, enough to power 2 million new homes annually, industry and market analysts have claimed in a new report.

The Solar Energy Industries Association and GTM Research, a Cambridge, Mass.-based market research firm, said the figures represent a tenfold surge compared to 2010, which is on track to set its own record.

A full gigawatt of solar may get installed this year for the first time, the report, U.S. Solar Market Insight, said—a roughly 150 percent leap from the 441 megawatts added last year.

One factor driving the boom is the ramp-up in large utility-scale photovoltaic (PV) setups.

“I would say we’re going to look back on 2010 as the year that the utility-scale market really emerged,” Shayle Kann, a managing director of GTM Research, told reporters in an Oct. 12 telephone press conference.

In the first half of 2010, over 23,000 PV systems were added, compared to about 28,000 in all of 2009. This includes an “unprecedented” 22 utility projects, the authors wrote.

“It’s hard not to be very bullish on the market,” Kann said.

Another factor propelling growth: The global financial crisis, among other factors, triggered a decline in solar panel prices. “This enabled the U.S. market to continue growing despite financial turmoil,” the report said.

All Eyes on U.S. Market

Tom Kimbis, director of policy and research at SEIA, said the eyes of the world are on the U.S. market. Investors are “hoping it will be the engine of growth over the next five years for the global market.”

But for now the nation still appears to be in fourth place. It made up 6.5 percent of global PV installations in 2009, behind Germany, Italy and Japan.

Concentrating solar power (CSP) technology, however, is another story.

Kimbis said: “We’re … quickly becoming the largest CSP market in the world. Roughly 80 megawatts are expected to come online in 2010. That’s ten times as much as came on last year, and we expect another tenfold growth of CSP in America in the next couple of years.”

A decades-old technology, CSP uses hundreds of giant mirrors to reflect and focus sunlight, which produces steam to drive electricity-producing turbines.

Spain is still the concentrating solar leader with 400 megawatts up and running. Currently, the U.S. has 10 gigawatts in various stages of development across the sun-blessed deserts of the Southwest.

Prop. 23 Could Throw “Kink in the Armor”

A total of 341 solar-electric megawatts were installed in the first half of 2010, the report said. California led the solar states with 120 megawatts, a 35 percent share, and continues to be the national model.

However, if Proposition 23 passes in November, it could derail some solar growth, the authors warned. The ballot measure would suspend California’s monumental global warming law.

“It certainly is going to hurt. There’s no question,” Kann said, adding that it would be particularly “dangerous” to large-scale projects.

“It would put a kink in the armor of what we’re expecting to be the quickest growing market segment in the country,” he said.

But Kann noted other states are stepping up their own solar efforts. “Geographical expansion and the growth of secondary markets” is the most important trend so far this year, he said.

In the first two quarters of 2010, 11 states separately installed more than 10 megawatts, compared with seven last year. New Jersey, Arizona, Florida and Ohio trailed California in the solar top five.

Treasury Cash Grant Needed

At the federal level, several policies have stimulated new solar capacity, but perhaps none as important as the Section 1603 Treasury cash grant, experts say.

The program, passed as part of the American Recovery and Reinvestment Act of 2009, gives developers cash instead of the standard 30 percent investment tax credit.

“The treasury grant program was essential to industry growth during 2009, and so far into 2010,” Kimbis said. The program is set to expire at the end of this year. “Congress needs to extend it,” he continued.

Kann said: “If the treasury grant program is not extended, financing will undeniably be the biggest bottleneck facing the PV market in 2011.”

The authors also called on the Department of Energy to fund the Loan Guarantee Program to help projects access hard-to-get capital, and to streamline its application and approvals process to keep the large projects in the pipeline moving.

The new market report, which will now be released on a quarterly basis, could be a first step in bringing attention to the U.S. solar situation, the authors suggest.

“There truly has been a dearth of good, granular up-to-date information on what’s going on in the U.S. solar market,” Kann said.

Image: langalex via flickr

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