US PV market forecast: Slower 2012, growth from 2014 on

Jon Worren of ClearSky Advisors provides best, worst, and expected case scenarios for the US solar PV market in coming years, and covers states’ and installation type trends.

December 1, 2011 — After the rapid expansion of the US PV market in the last few years, the US solar industry is likely heading for a period of slower growth. ClearSky Advisors’ recent analysis of the PV market in each of the 50 US states shows that — contrary to many hopes — the US market will not be able to provide immediate respite to all those photovoltaics manufacturers that are suffering from the current over-capacity and margin squeeze.

ClearSky Advisors’ most recent US PV Market Forecast shows that installed capacity will grow 7% to 1,628MW in 2012. Given falling equipment prices, the slow growth means that overall market value for 2012 will be flat or drop when compared to 2011.

Also read: North American solar PV market forecast and Ontario solar PV installations to surpass California

Developers in the US market will continue to reap benefits as overcapacity in the solar supply chain will see the cut-throat competition continue, with average selling prices for modules continuing to fall for at least the first part of 2012.

Figure. US PV installed volume forecast, 2011-2015. SOURCE: ClearSky Advisors
December 2011.

While the slower growth ahead might be a disappointment to less-competitive equipment suppliers, it is not all doom and gloom; pockets of opportunities can be found for those with a smart and flexible market approach. For the most part, these growth opportunities are starting to emerge in states with strong solar policy support.

One such example is Maryland, a small state with a solar carve-out that will drive cumulative growth of close to 80% between now and 2015. Players looking to capitalize on these opportunities must begin to look at their sales and marketing approach outside California and New Jersey. As the nature of the market changes, only those with the ability to calibrate their channel strategy to match the market opportunity have a chance of succeeding.

In terms of the overall market opportunity, the western US will remain the largest regional market for the foreseeable future. California and New Jersey will be the most important states for some time to come, even if both states will face intermittent market disruption.

Longer-term, from about 2014 on, ClearSky Advisors expects to see the beginning of a period with stronger and sustained growth take place, partly because the lower cost of solar equipment will make solar a cost-competitive source of energy in certain parts of the US (assuming the federal ITC continues). Even in those cases, a targeted approach is required to maximize the opportunity.

Increasingly, the US PV market will be dominated by utility-scale PV projects, because that is the way utilities and IPPs most often choose to meet the RPS targets.

ClearSky Advisors U.S. PV Market Forecast is based on the development on a number of market scenarios. The numbers referred in this article stem from our ?Expected Case? scenario, which — among other factors — assumes that the cash grant will be discontinued from the end of 2011.

Jon Worren is the co-founder of ClearSky Advisors. Learn more about him here: /content/rew/en/authors/u-z/jonworren.html

This article was originally published in the Renewable Energy World network by, and is reprinted here with permission.

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