Thursday, March 14, 2013

Solar Trade Group Reports Surge in U.S. Installations

Partly driven by an oversupply of cheaper panels from China, the domestic solar market had its best year in 2012, with the growth in installations outpacing that of the global market, according to an annual report to be released Thursday.


The report, from the Solar Energy Industries Association, the industry’s main trade group, and GTM Research, a renewable energy consulting firm, found that the amount of new solar electric capacity increased last year by 76 percent from 2011, raising the United States’ market share of the world’s installations above 10 percent, up from roughly 5 to 7 percent in the last seven years.

“It’s kind of a new world order,” said Shayle Kann, vice president for research at GTM. The United States continues to grow as European markets, which used to drive global expansion, have pulled back from feed-in tariffs and stagnated, he said.

“The U.S. has always been interesting and from a global standpoint, it’s always been a source of a lot of innovation,” Mr. Kann said.

“But now the U.S. market is holding a much more important place in terms of global solar demand.”

Part of what has been helping the market has been the low cost of solar panels, which is partly the result of the overdevelopment of manufacturing capacity in China. The resulting glut of cheap panels has contributed to the dire financial straits of huge producers like Suntech.

The average cost of a solar panel has declined by 60 percent since the beginning of 2011, according to the findings.

Some analysts said that low prices would force consolidations among manufacturers, prompting a rise in the cost of panels and a potential slowdown in momentum for the American installation industry.

But as other costs of solar systems also decline, marginal increases in the price of panels may not be as important, Mr. Kann said.

In the fourth quarter of 2012, for example, panels represented 13 percent of the cost for an average residential solar system, down from 32 percent in the fourth quarter of 2010, he said.

Kelcy Pegler Jr., co-founder of Roof Diagnostics Solar, an installation company based in New Jersey, said that there was still room to keep driving down the overall cost of solar systems even if panel prices went up.

“I don’t want to understate how important material pricing is — it sure is important — but I don’t think we’re anywhere near optimal efficiency with the administrative and processing of solar,” he said.

The utility sector had the biggest jump in solar installations, more than doubling compared with 2011.

And several large concentrating solar projects, including the enormous Ivanpah field in the Mojave Desert, took major steps toward completion.

Some of the concentrating solar projects, which instead of panels use mirrors that reflect sunlight to heat water or other liquids, were the beneficiaries of an Energy Department loan guarantee program.

nytimes.com

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