Another Banner Year for Solar Power: Industry Breaks Records in 2012

In 2012, the U.S. solar industry grew 76 percent over 2011, adding 3.3 GW of new solar capacity.

Jennifer Runyon, Managing Editor, RenewableEnergyWorld.com
March 14, 2013 | 7 Comments

Today the U.S. Solar Energy Industries Association along with GTM Research released the results of its annual year in review, and 2012 numbers give the solar industry another reason to celebrate.

In 2012, solar proved once again to be the fastest growing energy source in the U.S. The Solar Market Insight annual addition shows that as a nation, the country installed more than 3.3 GW of solar capacity, an increase of 76 percent over 2011. In terms of market size, at $11.5 billion, the solar market is 34 percent larger than it was in 2011 and SEIA points out that this figure doesn’t include any of the trickle-down industries that also benefit from the increased growth in the solar market.

Total U.S. PV Installed Capacity Approaching 10 GW

the United States accounted for 11 percent of the growth in the global solar installed capacity in 2012, this is the largest market share that U.S. has taken for at least fifteen years, according to the report. The residential market saw 83,000 installations and eight of the 10 largest PV installations were completed in 2012. In total, the installed PV capacity in the U.S. now stands at 7.2 GW, equivalent to the power capacity of seven nuclear power plants. By the end of 2013, the industry expects that it will top 10 GW.

PV grew in each of its three market sectors: residential, commercial and large-scale. The residential market installed 488 MW of solar capacity representing a 62 percent growth over 2011; non-residential (commercial) installed 1.04 GW, a 26 percent growth over 2011; and the large-scale market installed 1.78 GW up 134 percent over the previous year, said SEIA and GTM in the report. California remained the top state for installing PV, with 1.033 GW worth of installations taking place in 2012, and Arizona (710 MW), NJ (415 MW), Nevada (198 MW) and North Carolina (132 MW) took second through fifth place. Interestingly neither North Carolina nor Arizona were in the top five states in 2011, showing the incredible pace in which PV grew in those states. More detail on state solar markets in the image below.

CSP Projects Make Headway

In 2012, the concentrating solar power (CSP) market also made progress. Cogentrix’s 30-MW Alamosa solar project came online and all phases of Brightsource Energy’s 392-MW Ivanpah project progressed steadily in 2012 such that the entire project is set to come online this year, according to the report. In addition, Abengoa’s Solana Generating Station is more than 80 percent complete and will most likely come online in 2013, according to the report. Construction of Power Tower at SolarReserve’s Cresent Dunes Solar Project was also completed. Expect to see a large amount of CSP capacity online by the end of 2013 if all projects under construction continue to progress as planned.

Pricing: Solar Power Prices Experience Dramatic Decreases

In 2012, installed prices for solar went down in all three market sectors. According to the Solar Market Insight report authors, year over year, the national average prices declined by 26.6 percent in 2012, falling from $4.10 per watt in 2011 to $3.01 per watt in 2012, although these numbers are skewed by the sizable number of large-scale projects that came online in 2012. According to the report:

From Q4 2011 to Q4 2012, residential system prices fell 18.1% percent, from $6.16/W to $5.04/W. Quarter-over-quarter, installed costs declined by 3.5% percent. Installed prices came down in most major residential markets, including California, Arizona, New Jersey, and Massachusetts, and in a number of states fell below $4.00/W.
Non-residential system prices fell 13.3% percent year-over-year, from $4.65/W to $4.27/W. Quarter-over-quarter, installed costs actually increased by 1.4%, primarily due to a large quantity of higher-cost, government projects connected in California. SREC states, such as New Jersey and Massachusetts, saw the most significant price declines.
Utility system prices once again declined quarter-over-quarter and year-over-year, down from $3.20/W in Q4 2011 and $2.40/W in Q3 2012 to settle at $2.27/W at the end of 2012.

Overall, SEIA and GTM don’t expect trade tariffs to have any real impact in pricing going forward as Chinese manufacturers will develop workarounds in order to keep panel prices low. (The tariffs, which were finalized in 2012, will subject solar panels that include cells manufactured in China to tariffs up to 35 percent.) In fact, the analysts believe that prices may continue to fall in 2013 both globally and in the U.S.

In 2013, the report authors predict that 4.3 GW of solar PV will be installed, which would represent a 29 percent growth over 2012. The analysts believe that the slowdown in growth will be driven by a slow-down in the large-scale utility market as distributed generation will begin to gain market share.

Today, March 14 at 11:00 AM Eastern Time, SEIA hosted a Google Hangout in which report author Shayle Kann of GTM Research, SEIA President Rhone Resch and Recurrent Energy CEO Arno Harris discussed the results of the Solar Market Insight Report. You can watch video the event here. In addition, you can tweet your comments or questions under hashtag #SolarInsight.

Lead image: Fireworks via Shutterstock

7 Comments

Phil Manke
March 16, 2013

Way I see it, distributed 'solar energy production' could be profitable for homeowners and small business, rather than seen as a cash outlay. If the deferred costs were added as SREC's or FITs for energy production, the cost of installation would be covered and the cost of the money to do it as well, getting the banks on board. Seems obvious to me that wide spread adoption of distributed energy will stabilize the dollar and diminish some of the rampant speculation in 'center sourced' energy markets, all things that large money interests (in league with 'their' govt) would rather keep from national awareness. Wake up or get crispy, bunkey.
...The reason I say this is because many articles embrace the move of govt to fund many corporate and Ute projects with sums of money, when the general public would readily embrace distributed energy and the profit it deserves. Govt should be pushing smarter grids to enable the adoption of "small business and home solar." "Corporate business will take care of business".

Gerry Wootton
March 15, 2013

Storage is not such a big deal. First in the southwest demand peaking is pretty well synchronized with the sun with, as Rhone mentioned, a few hours of lag into the dinner hour. Until there is substantial penetration, storage is a non-issue. The system already has to deal with fossil fuel generators that go off line merely to achieve a desired price point.
Second, storage isn't all that expensive as those (like me) that have off-grid systems can show. The cost of battery storage with medium scale commercial technology is ~0.08 $/kWh and ~0.19 $/kWh for small scale systems. In locations where the swing between peak to off-peak rates is high, storage systems by themselves may be cost justified. There is a cost issue with battery systems that require no ventilation or other infrastructure since they range from 0.35 to 0.65 $/kWh. There seems to be some confusion as to what technology is best for stationary systems - particularly, I see a lot of references to mobile technology which is irrelevant.
Also, avoid local optimization. Think of the grid as a system not a collection of point sources. One of the simplest solutions is to co-locate variable generators with dispatchable generators, especially those with finite total capacity; for example, a native band co-located a solar farm with a hydro dam to provide firm capacity equal to the sum of the two with smoothing of both daily and seasonal capacity variations (e.g. more sun, less water in July).

Gerry Wootton
March 15, 2013

With respect to net metering - Let the market work!? That's anathema to a monopoly based system. Of course, they will always threaten increased rates if users are allowed to produce some of their own power. That actually makes no sense but it seems to be a marketable proposition. While customers are paying $.38 per kWh off the grid during peak demand (largely related to solar intensity) letting users meter power onto the grid at 0.08 $/kWh is going to drive prices up? What we have is a system where producers are allowed to create scarcity in order to drive up peak prices to the point where quality of service is compromised but customers become acclimatized to brownouts and blackouts and voltage and frequency regulation services can be provided at still higher prices. When profit margins are allowed as an adder to cost and tax revenues are also a ratio, it is not in the best interest of the producer or the government to reduce cost by expanding supply. Caps are merely a means of ensuring high consumer prices. Virtually every utility has a price structure which actually increases the effective rate for customers who use very little power off of the grid. Customers who use no net power or even no power still pay a host of fees for their grid connection (mathematically, an infinite $/kWh rate)and, in many cases, by regulation are not allowed to not be connected. So don't grow veggies in your backyard because that will increase prices at the supermarket - yeah, that's the ticket.

Phil Manke
March 15, 2013

As solar programs move into acceptance in the continental USA, the amount of inSOLation in states other than the SW seems to be diminishing during the 4th and 1st quarters. Is there any data to support this awareness? These are the periods when sunlight is sparse and getting sparser with time, probably because of climate change.

Gerry Wootton
March 15, 2013

It would be interesting to see what portion of PV deployment in Arizona is driven by California and what portion is actually Arizona's doing.

ANONYMOUS
March 15, 2013

No worries about the solar tariff - Solarworld has stepped up to the plate with 0.90 $/W modules to fill the void ... oh wait, that's not them? My bad.

Hakki Surel
March 15, 2013

Utility scale solar powr prices still high in the USA $2.27 at the end of 2012, should be around $1.5. EPC contracting and permitting costs seem high.

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Jennifer Runyon

Jennifer Runyon is managing editor of RenewableEnergyWorld.com coordinating, writing and/or editing columns, features, news stories and blogs for the publications. She also serves as conference chair of Solar Power-Gen Conference and Exhibition...