Early indications are that 2011 will be the strongest year ever for solar installations, although not quite as strong as most people believed. For the third quarter of 2011, solar installations in the U.S. were approximately 449.2 megawatts which was an increase of almost 40% over the prior quarter, 324.3 megawatts, according to Solar Energy Industries Association and research firm GTM Research. That means that the total for the first three quarters in 2011 exceeded the entire total of installed solar in 2010.
The reason for this has been that the due to a global over-supply of solar panels, which has hurt solar manufacturers but been a boon to installers and the consumer. In addition, the installed has also decreased as a result of a decline non-module costs such as installation labor, marketing, overhead, and inverters. In fact, these costs have declined by roughly 18 percent from 2009 to 2010.
The strength of the increase in solar installations was in the utility-scale market with 23 projects accounting for more than 200 MW of the quarter’s total — a 325 percent increase from the second quarter. In addition, solar installations in the residential market increased 21%, although smaller commercial scale installations declined by almost 25% due to changes in state incentives in top U.S. solar markets including California, New Jersey and Pennsylvania.
With respect to the market and the market, sustained boom periods have over-saturated those markets with enough solar capacity such that state utilities have met their mandates for renewable energy production, ultimately lowering the value of state incentives.
As a result of weakness in the commercial solar market, SEIA revised its 2011 installation forecast downward to 1.7 GW from 1.8 GW which would still represent year over year growth of approximately 89%.
As for 2012, the U.S. solar market is expected to continue to grow but will face several serious challenges from dwindling state incentives, expiration of a key federal subsidy that allows developers to received cash for up to 30% of the cost of a new solar installation, and continued influx of cheaper Chinese-made solar panels.
Read More: U.S. Solar Installations Continuing to Increase via Www.cleanenergyexperts.com.