Ryan McNeill of Renewable Energy Corporation shares his analysis of where the ever-evolving solar energy industry is headed and how the falling prices of solar-powered components indicates growth.

The results are in, and the solar panel industry is officially booming. In keeping with the year’s previous reports, the U.S. Solar Market Insight Q3 2012 Report details both rising installs and falling prices across the board, and these trends show no signs of stopping. Traditionally the biggest quarter for the industry, the 4th quarter of 2012 is expected to show even greater gains.

The number of solar MW installed in the U.S.A. grew 44% from Q3 2011 to Q3 2012, bringing the country’s total solar capacity to more than 5,900 MW. However, Q4 2012 is projected to bring the total for the year to nearly 3,200 MW and the country’s cumulative capacity to an impressive 7,100 MW.

Solar Panels in Maryland Lead the Way in Q3 2012

While California continues to hold a strong lead in installs, several other states have made significant gains; new installs of solar panels in Maryland propelled the state from number 14 in Q2 to number 6 in Q3 and from 16 to 14 in cumulative installations during the same time. Maryland was also one of five states that saw a gain of at least 5 MW installed solar capacity over the previous quarter, with the others being Colorado, Florida, Massachusetts, and Pennsylvania. In fact, installs of solar panels in Maryland had the greatest quarter-over-quarter increase of any state, making this “one to watch” in 2013.

The Costs of Solar Materials Continue to Fall

So, what has spurred such growth for solar panels in Maryland and across the board? Although the PV industry has been on the upswing for many years, one major factor behind the recent jump in installs is falling prices. The installed cost per Watt of solar panels fell in every segment (residential, non-residential, and utility) from Q2 2012 to Q3 2012, in keeping with an ongoing descent over the past year. For residential installs, the price per Watt dropped 4.4% from Q2 2012 to Q3 2012, falling from $5.45 to $5.21.

This price drop is due to many factors, not the least of which is the falling cost of panel components, which have remained soft since 2011 due to global oversupply. From Q4 2011 to Q3 2012, the prices of four major components (polysilicon, wafer, cell, and module) all dropped significantly, in some cases by more than 50%.

Solar Leasing Playing Large Role in Install Growth

Another major contributing factor to the rise in installations is solar leasing. This unique program eliminates one of the biggest obstacles for those looking to install a solar system: upfront cost. By offering little to no money down options, solar leasing companies provide an affordable way for homeowners and companies alike to take advantage of the technology. In fact, some states’ total installs in Q3 2012 consisted of up to 91% third-party systems.

Projections

The falling prices and rising installs show no signs of stopping, and forecasts from GTM Research and Solar Energy Industries Association® (SEIA®) show exponential growth for the PV industry. While it’s impossible to know the exact number ahead of time, it’s safe to say that Q4 2012 should be one of the biggest, if not the biggest, ever for installs in the United States.

About the author: As president of Renewable Energy Corporation, Ryan McNeill writes about solar energy in the Mid-Atlantic including Maryland, Washington D.C., and Northern Virginia.