In the second quarter of 2013 the U.S. saw 832 megawatts of photovoltaics installed in the 28 leading states, making it the second-largest quarter for solar in the U.S.—ever. That’s according to the GTM Research and the Solar Energy Industries Association (SEIA) U.S. Solar Market Insight: 2nd Quarter 2013, which was released Sept. 12. The second quarter achievement is also 100 megawatts more than the amount of solar photovoltaics (PV) installed in the first quarter, which reached 723 megawatts.
Traditionally, the strongest quarters for the U.S. solar industry have been the fourth quarter. Last year's fourth quarter was the strongest yet, with 1.3 gigawatts of solar electricity installed—results that indicate that the U.S. is on track for a record-breaking year. Indeed, the report anticipates that 4.4 gigawatts of PV will come online in 2013, up from 3.3 GW in 2012, which the report says is an overall annual growth rate of 30 percent. In addition, 912 megawatts of of concentrating solar power (CSP) are expected to come online in 2013 (none came online in 2012). With forecasts that anticipate more than 5 gigawatts of solar will come online this year, the U.S. is positioned to surpass the 10 gigawatt barrier and come close to the 15 gigawatt barrier.
“America’s solar energy industry remains on course to have another record-shattering year,” said SEIA President and CEO Rhone Resch. "Today, there’s more than 9,370 megawatts (MW) of total solar electric capacity across the U.S.—enough to power more than 1.5 million American homes, including the White House.”
The sheer rate of growth is largely attributable to utility PV plants coming online during the second quarter of 2013. The report finds 38 projects (totaling 452 megawatts of utility-scale projects) came online from April through June, which represents a 42 percent growth rate over the first quarter of 2013. But, observes Shayle Kann, vice president of Research at GTM, the residential market is of particular interest. “Distributed generation is the big story in the U.S. solar market this year,” Kann said. “We expect significant growth, especially in the residential sector, but the future will be dictated by the increasingly-complex nexus between the solar industry and utilities.”
The SEIA report shows that residential solar had a roughly flat quarter, while the commercial market stalled. Still, the report anticipates that more than 100,000 individual solar systems will be installed by year’s end with a solar project being installed every four minutes across the nation. Helping to move those numbers forward, the report says the average price of a residential PV system fell to $4.81 per watt and the non-residential price fell to $3.71 per watt.
The report also identifies issues that can challenge the solar industry’s continued growth. Among them is the continual battle utilities across the country are having over net-metering (NEM) and rate design. “NEM is the backbone of DG deployment in the U.S. The fundamental question at hand is how to appropriately value DG in order to properly compensate DG system owners, while maintaining grid reliability and fair pricing for all ratepayers,” the report says.
Another concern is commercial PV’s lack of growth in the first half of 2013. “Over the first half of the year, the non-residential market shrank 11% relative to the same period in 2012. Although some of this downturn can be attributed to specific large state markets (such as New Jersey) cooling off, the non-residential market has generally been slow across most state markets,” the report asserts. However, it contends that growth in the segment is expected to uptick in the second half of the year.
The other concern is the reduction in utility’s solar procurement. “Utilities in a number of key states (most notably California) have slowed down their procurement of power from new solar projects, leaving some developers with stranded early-stage assets,” the report states. The majority of current contracts were driven by state renewable portfolio standards, but the report says the next wave of solar projects will likely need to be driven by cost-competitiveness.
Despite concerns, SEIA and GTM are bullish on the continued growth of solar in the U.S. The report anticipates that annual installations will rise to 9 gigawatts in 2016, with more than 1 million cumulative installations in operation.