GTM Research and the Solar Energy Industries Association (SEIA) recently released the U.S. Solar Market Insight: Third Quarter 2012. The report finds that the U.S. solar photovoltaics (PV) market installed 684MW in the third quarter of 2012, representing 44% growth over the same period last year. This quarter marked the third largest on record for the U.S. PV industry and raised the total installed capacity through the first three quarters of the year to 1,992MW — already surpassing 2011’s annual total of 1,885MW.
Cumulatively, there are now 5.9GW of PV, which converts sunlight directly to electricity, operating in the U.S. from more than 271,000 installations. Combined with concentrating solar power facilities (CSP), which convert the sun’s heat to electricity, there are more than 6.4GW of solar electric capacity installed in the United States, enough to power more than one million average American households.
The third quarter featured strong growth in distributed generation (DG) markets; the residential PV sector installed more than 118MW, an all-time high for a quarter, while the commercial market (including governmental and institutional facilities) hit 257MW, rising 24% above last quarter.
FIGURE: U.S. PV Installations by Market Segment, Q1 2010 to Q3 2012
In addition to solid growth nationally, Colorado, Florida, Maryland, Massachusetts, and Pennsylvania saw growth of 5MW or greater compared to the previous quarter. Behind Maryland, Massachusetts saw the greatest quarter-over-quarter increase, up from 25MW in Q2 2012 to 40MW this quarter. All Massachusetts installations in Q3 2012 came from the commercial and residential sectors, boosted by the expansion of net metering allowances and an influx of national retailers that offer leasing and other innovative third-party ownership models. For the quarter, the top ranked states were California, Arizona, New Jersey, Massachusetts and Nevada. As of Sept. 30, top states for total cumulative installed solar electric capacity were: California, New Jersey, Arizona, Nevada and Colorado. (See complete state rankings charts here.)
The GTM and SEIA research teams expect third-party leased PV systems to remain a hot option in the market for homeowners into 2013 and beyond. During this quarter, residential PV markets in Arizona, Colorado, California, and Massachusetts saw third-party systems range from 57 to 91 percent of total residential system installations.
“While Q3 2012 was remarkable for the U.S. PV market, it is just the opening act for what we expect to see in Q4,” said Shayle Kann, VP of research at GTM. “We forecast more than 1.2GW of PV to be installed next quarter on the back of developers who are pushing to meet year-end deadlines in both the utility and commercial segments. We also expect to see the residential PV market post another record number in Q4, as third-party residential installers gain more traction in mature, cost-effective markets.”
Historically, Q4 has been the strongest for PV installations in the U.S. In 2010 and 2011, Q4 represented 41 percent and 42 percent of annual installations, respectively. U.S. Solar Market Insight forecasts a similar Q4 bump in 2012 with approximately 1,200MW to be installed. That would not only account for 38% of this year’s forecasted total, but would be the largest single quarter on record for the U.S. PV market by far. SEIA and GTM Research expect 2012 growth to top 70% with a record 3.2GW of solar installed — enough to power more than half a million average U.S. homes.
“This quarter’s record residential growth shows the power of innovation in the U.S. solar industry,” said Rhone Resch, president and CEO of SEIA. “With costs continuing to come down and new financing options, solar energy is affordable today for more families, businesses, utilities, and the military. Thanks to smart long-term policy, the solar industry is growing to meet the challenge of putting Americans back to work and helping to grow both our nation’s economy and our clean energy portfolio.”
System prices for PV projects in the United States continued their downward trajectory in third quarter 2012. Average residential system prices dropped quarter-over-quarter from $5.45 per watt to $5.21 per watt nationally while average non-residential prices declined 15 cents per watt, falling to $4.18. Average utility system prices, which are currently at $2.40 per watt, continue to see the greatest reduction in prices of the three market segments covered, falling by 30 percent since third quarter last year.
Commercial installations grew 24% in third quarter over second quarter in 2012, led by notable growth in California and Massachusetts; a strong fourth quarter is also expected for this market.
"The data coming out of the "U.S. Solar Market Insight" reports mirrors what we are seeing as an owner of commercial rooftop solar projects in the U.S.," said Mike Ward, U.S. president, IKEA. “We completed 23 solar installations in 2012 and next year, we plan to deploy at least 7.5MW of solar PV at five more IKEA locations across the United States. Having strategic data and understanding trends in each state market is crucial for us to achieve our goal of having 90% of our facilities powered by solar and reaching a total generating capacity of 38MW.”
Today, the U.S. solar energy industry employs 119,000 Americans at 5,600 companies, mostly small businesses, across all 50 states.