The World's #1 Renewable Energy Network for News, Information, and Companies.

Q2 Report Shows US Solar Market Booming, Utility-scale Projects Leading

Solar panel installations in the United States more than doubled in the second quarter of this year, and it is on track to increase 71 percent in 2012 from the previous year, according to a report released by the Solar Energy Industries Association and GTM Research today.

The second quarter saw blockbuster growth for projects built for utility owners or for selling power to utilities. Developers built 477 MW of utilty-scale projects during the second quarter and are building another 3,400 MW, which is equal to 71 percent growth over 2011. They will likely complete 1.1 GW during the second half of 2012, according to the report. By the end of the second quarter, about 5.16 GW for photovolatic systems are up and running in the country.   

The growth of the utility segment came as no surprise given that many states now require their electricity retailers to increase the amount of renewable energy they sell to consumers. California’s utilities recently marked a big milestone of meeting a 20 percent goal, and they are tasked to reach 33 percent by 2020.

The report also noted a curious development: prices for third-party owned solar panel systems in California fell below prices for direct purchases for the first time. The average installed price for third-party owned residential systems was $5.64 per watt while the average price for direct purchases was $5.84 per watt.

Third-party owned systems — those that are sold via long-term leases or power purchase agreements — have historically recorded higher prices in the state’s incentive tracker. One reason given for the higher figure was that installers and their investors wouldn’t recoup their investments for many more years, so naturally they would price a leased rooftop system at a higher price than a system they sell outright to a homeowner.

Solar leases or power purchase agreements have become popular for homeowners mainly because they don’t require a high upfront cash payment before consumers start enjoying the benefits of solar electricity, such as lower monthly utility bills. Instead of owning a set of solar panels, a homeowner pays only for the solar electricity produced from the panels, which are owned by the installer or an investor who financed the equipment and installation. Over 70 percent of the installations in California, Colorado and Arizona in the second quarter involved these financing models, the report said. The popularity has propelled the growth of startups such as SolarCity, SunRun and Sungevity. SunPower  touted huge growth in its one-year-old residential lease program last month.

The price drop for third-party owned systems, while noteworthy, doesn’t mean consumers also are paying less for them than for systems they pay cash for, noted Shayle Kann, vice president of research at GTM Research. The state’s incentive tracker shows the price for installing a rooftop system but doesn’t collect data about the terms of leases or power purchase agreements.

The market segment that serves business, government organizations and nonprofits had less to boast about — installations fell 33 percent from 291 MW in the first quarter to 196 MW in the second quarter. California saw a significant quarter-over-quarter drop of 45 percent, followed by a 35 percent fall in New Jersey.

The decline in New Jersey was likely a result of an oversupply of renewable energy credits that solar power project owners sell to utilities to finance new projects (utilities could use the credits to meet the state’s renewable energy mandate). In July, the state adjusted its solar RPS requirements in an attempt to correct the oversupply problem.

While the solar installation business is growing, the solar manufacturing sector continues to struggle mightily. The solar market has been beset by a glut of solar panels for nearly two years now, and that has caused the wholesale prices to plummet by over 50 percent. More solar panel makers filed for bankruptcy during the second quarter, including Abound Solar, which received substantial backing from the federal government to expand its production of cadmium-telluride solar panels. General Electric shelved its plan to build a 400-MW factory for making cadmium-telluride solar panels in Colorado. The company was once keen to compete with First Solar for dominance in the thin-film business, but the rapid fall of wholesale prices for solar panels prompted GE to suspend its plan. 

RELATED ARTICLES

Renewable Energy Finance

Clean Energy ETFs Are on a Tear

Eric Balchunas, Bloomberg Green investing used to be synonymous with losing money. But while the S&P 500 Index is up 2 percent this year, and the MSCI All-Country World Index is up 5 percent, clean energy ETFs have double-digit re...

Wheels, Towers and Trees: Unconventional Renewable Energy Technologies in the Pipeline

Andrew Williams, International Correspondent A number of companies around the world are developing novel technologies in an effort to grab a slice of the global renewable energy market.  Although many of these technologies are simple incremental improvements to e...
UK Parliament Clean Energy Leaders

UK Government Names Clean Energy Cabinet Members

David Appleyard, Contributing Editor With the UK general election now over and a majority Conservative Party government in place, the re-elected Prime Minister David Cameron has now named key members of the government charged with steering the UK’s clean energ...
Microgrids

Coast to Coast and Across the Electric System, Microgrids Provide Benefits to All

Dick Munson, Environmental Defense Fund At the most obvious level, microgrids could disrupt today’s utilities and their regulated-monopoly business model, because they challenge the centralized paradigm. In a nutshell, microgrids are localized power grids that ha...
Ucilia Wang is a California-based freelance journalist who writes about renewable energy. She previously was the associate editor at Greentech Media and a staff writer covering the semiconductor industry at Red Herring. In addition to Renewable En...

CURRENT MAGAZINE ISSUE

03/01/2015
Volume 18, Issue 3
file

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

EU PVSEC 2015 (European PV Solar Energy Conference and Exhibition)

The EU PVSEC is the largest international Conference for Photovoltaic re...

More Power, More Profit Tour - San Diego

Register for the SMA More Power, More Profit Tour for free, in-person sa...

More Power, More Profit Tour - Syracuse

Register for the SMA More Power, More Profit Tour for free, in-person sa...

COMPANY BLOGS

EU PVSEC 2014 extends its Scope

Added focus on application and policy topicsAbstracts for conference con...

EU PVSEC 2014: Call for Papers Receives Great Response

More than 1,500 contributions apply for presentation in AmsterdamScienti...

Boulder County Residents Generate Their Own Energy with Community S...

Despite a soggy afternoon, solar energy advocates gathered at ...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS