Steve Leone, Associate Editor, RenewableEnergyWorld.com
June 13, 2012 | 14 Comments
New Hampshire, USA -- For all the turmoil surrounding the American solar industry, the U.S. followed up its record fourth quarter of 2011 with its second-strongest quarter yet.
According to new figures released by GTM Research and the Solar Energy Industries Association (SEIA), 506 megawatts (MW) of new installations came online during the first quarter of 2012. That robust figure followed the American industry’s record-setting 780 MW that came online between October and the end of December, and it puts it on pace to easily surpass last year’s installation mark.
The new numbers are increasingly meaningful as the industry looks to assess the fallout from a string of potential market disruptions. The Section 1603 grant expired at the end of 2011 and the low-cost Chinese panels driving much of the U.S. industry were recently hit with hefty tariffs, the largest of which dates back to February of this year.
But so far, so good from an installation perspective as an 85 percent growth over the first quarter of 2011 has increased confidence that the industry will maintain its momentum through 2012. The better-than-expected first-quarter figures has led GTM Research to bump up its 2012 projections by about 15 percent to 3.3 gigawatts (GW), which would represent a big leap over the 1.8 GW installed in 2011. From there, the projected growth is relatively flat in 2013 as the impacts of the 1603 expiration and the new tariffs finally catch up with the industry. But strong growth is still projected for 2014 (about 5.3 GW), 2015 (about 6.6 GW) and 2016 (about 8.4 GW) as the U.S. emerges as a global market leader.
The readjusted 2012 outlook, coupled with expected declines in the European market, would push U.S. market share into double digits at nearly 11 percent. This would be up from 7 percent in 2011 and 5 percent in 2010, and it’d make the U.S. the fourth largest global PV market. The upward trajectory would also make it one of four large-scale international markets with expected long-term growth, with the others being China, India and Japan.
Two major factors helped fuel U.S. installation in the first quarter, according to the report. At least 1 GW of modules were “safe harbored” at the end of 2011, a common strategy used to qualify modules and inverters for the 1603 grant ahead of its expiration. Many of those modules were deployed during the first quarter of 2012. While the smaller countervailing duty was announced during the first quarter, the much larger anti-dumping tariff wasn’t announced until May. The first quarter was marked by uncertainty and new strategies to avoid penalties. The report notes that anecdotally, some Chinese suppliers became the importer of record, so they could absorb the tariff themselves and sell “tariff-proof” modules. Still, many developers have shifted some procurement to non-Chinese producers.
The role of American panel manufacturing has taken center stage in the political fight surrounding the solar industry. From that perspective, the first quarter proved to be disappointing as U.S. solar panel production amounted to 160 MW, less than half the amount produced during the first quarter of 2011.
Other key takeaways from the report include: