Through the third quarter of 2011, the US solar market has installed more than 1,000 megawatts (MW) of solar capacity on the year, already surpassing the 2010 annual total of 887 MW, according to the US Solar Market Insight: 3rd Quarter 2011 report. This includes 449 MW installed in the third quarter alone – a record for quarterly installations and more new solar electric capacity than was added in all of 2009. This also represents 140 percent growth over the same quarter last year.
Much of this growth is due to the Department of Treasury's 1603 program, which is set to expire on Dec. 31 unless Congress extends it. In the absence of an extension of the program, the report predicts that there will be a tax equity bottleneck for projects in 2012, leading to a possible slowdown in installations in late 2012 and into 2013.
"The US solar industry is on a roll, with unprecedented growth in 2011," said Rhone Resch, President and CEO of SEIA. "Solar is now an economic force in dozens of states, creating jobs across America. But our industry needs stable policy on which to make business decisions, and unfortunately an underlying mechanism for financing solar projects is scheduled to expire on December 31. To keep the industry growing and creating jobs in the US we need Congress to extend the 1603 program. The 1603 program has done more to expand the use of renewable energy than any other policy in US history. Our country is not in a position to have Congress turn their back on American industries, and it is critical that Congress extend the 1603 program in the few days left before the end of the year."
Highlights from the third quarter report include:
While domestic solar markets are booming more than ever, the report also finds that US solar is facing more uncertainty than at any point in recent history. On one hand, solar module prices are falling precipitously and system prices have never been lower; on the other hand, the market faces substantial risks in the form of legislative, financing, political, and market barriers.
"US solar is entering 2012 with a sense of cautious optimism," said Shayle Kann, Managing Director of the solar practice at GTM Research. "There are three questions on the mind of everyone in the market: one, what would be the impact of the 1603 Treasury Program's expiration; two, can emerging commercial markets like Massachusetts, Colorado, Ohio, Tennessee, and Hawaii ramp up as major markets like California, New Jersey and Pennsylvania trend downward; and finally, how will the trade petition against Chinese solar imports impact market dynamics, both in the immediate term and if duties are ultimately levied?"
With the 1603 Treasury Program scheduled to expire at the end of this year, solar project developers will be scrambling to either complete, or safe harbor, projects in the fourth quarter of 2011 in order to qualify for the program's grant. This will undoubtedly produce robust installation numbers through the end of 2011. However, the uncertainty surrounding the program's extension threatens the market's growth in 2012 and beyond.
[Image: US PV Installations, 2010-Q3 2011. Courtesy of GTM Research and SEIA]
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