Solarbuzz report sees US PV market doubling in 2011 due to lower module prices, incentives
Sep 8, 2011 - Syanne Olson - pv-tech.org
According to Solarbuzz’s new “United States PV Market Report”, the country’s PV market is set to double in the second half of 2011. While other industries fight to control their economic woes, incentives and policies at the federal, state and local government level have bolstered the US PV market over the past year leading Solarbuzz to predict that the country will become the third-largest solar PV market, behind Germany and Italy, in 2011.
Helping the US PV market along have been policies and incentives across the different government levels. The federal government instituted the Investment Tax Credit (ITC) while the Treasury Cash Grants continue to help stimulate PV investments. Renewable Portfolio Standards (RPS) are helping individual states expand in the utilities portion, which grew from 17% of the on-grid PV market in 2009 to 31% in 2010. As PV-Tech earlier reported, California leads the US in the PV market domination. The state increased its Renewable Portfolio Standards (RPS) to 33%, putting it ahead of its next closest competitors, New Jersey, Arizona and Colorado.
Also helping the US PV market are the new newcomers to the state top list in 2010 including Pennsylvania, New Mexico and Nevada, which is home to the largest PV project in the US to date; the 48MW Copper Mountain Solar Project. Solarbuzz noted that many of the states in the top 10 list used RPS and compliance methods, including RFQs, rebate incentives and REC financing, to influence the development of the PV market in each state.
In its most assertive forecast Scenario, Solarbuzz outlines how utility demand will steadily grow accounting for nearly 60% of the 2015 US on-grid PV market. The research organization noted how demand for the utility segment has been, and will continue to be, driven by state RPS. The report additionally points to a shift in the market share for module manufacturers during 2010, whereby China-based manufacturers raised their share from 11% in 2009 to 37% in 2010. Solarbuzz maintains that this has led to direct sales between those manufacturers and system integrators, as well as solar lease providers working with system integrators. Solarbuzz noted that there are now ten major downstream channels to end-market, with 2010 representing strong build in the market share of project developers and direct utility procurement.
Along with the utility demand in 2010 continuing to show strength, the project pipeline in the US led Solarbuzz to conclude that the country’s market share is more than likely going to escalate over the next few years. Solarbuzz pointed out that the typical business practice of two or three utility systems installing more than 10MW in a 12-month period, changed to 30 projects of 10MW or more started or completed during 2010 alone. The report asserts that this trend is just the beginning of the restructuring and reshaping the US market will undergo as utility-sized projects become the principal driver of demand growth.
“With rapid declines in factory gate prices over the past eight weeks as manufacturers and distributors focus on depleting module inventories, demand has picked up across residential, corporate and government segments,” noted Craig Stevens, president of Solarbuzz. “This acceleration is being supplemented by explosive utility demand and the rush to install before federal cash grants are scheduled to expire at the end of the year.”
Solarbuzz concluded that over the next five years, the US market will up to 6.4GW. The report states that this figure depends on the situation and corresponds to a CAGR of up to 47%. The report acknowledged that the extension of the Treasury Cash Grant after the end of this year would be a driving factor for the demand in the non-residential and utility sectors and observed that if an extension were not passed, less capital would be available for large PV projects held back by a limited tax equity capability.