US solar PV installations soar as European markets stall

20 June 2011

US solar photovoltaic (PV) installations soared in the first quarter of 2011, stoking hopes the country could regain a larger share of the global market.

In the first three months of 2011, the US installed 252MW of grid-connected PV, a 66% increase from the first quarter of 2010, according to a report released by the Solar Energy Industries Association (SEIA) and analysis firm GTM Research. This was due to falling solar energy equipment costs and a rush to take advantage of the Section 1603 Treasury cash grant programme.

“The 1603 programme has effectively filled the void that has existed in the tax equity market over the last two years,” said Tom Kimbis, SEIA’s vice-president of strategy and external affairs.

The cash grant programme was expected to expire in 2010, but was extended until the end of 2011. SEIA believes the programme should be extended to 2016, the expiry date for the solar investment tax credit, Kimbis said.

“The extension is one of the linchpins of continuing the growth of the solar market at the rate it’s growing today,” he added. “We’re pushing very hard on it. We’re optimistic we’ll get something extended by the end of this year. [But] we’re facing a tough environment in extending anything with a cost.”

No concentrating solar projects came online in the US in the first quarter of 2011, but several major projects have received conditional or final loan guarantees from the Department of Energy (DOE) this year, including the 484MW Blythe Phase I ($2.1 billion) and the 370MW Ivanpah project ($1.6 billion), both in California.

In 2010, the US installed 887MW of grid-connected PV, representing 104% growth over the 435MW installed in 2009. But the US market share still shrunk to 5% from 6% in 2009 due to even faster growth in the rest of the world.

US share to grow at Europe's expense

But that trend is expected to reverse this year as some European countries reduce their solar subsidies or feed-in tariffs by double-digit percentages, which will slow their growth rates significantly this year, according to the report.

The US share of the global solar market will likely reach 9% by the end of 2011, up from 5% at the end of 2010, SEIA said. In comparison, the two largest solar markets, Germany and Italy, will have a 32% and 28% share of the market, respectively, compared to 42% and 23% in 2010.

German installations, for example, will likely be flat year on year, as opposed to the 100% growth rate expected in the US in 2011, said Shayle Kann, managing director of solar at GTM Research.

“The US is likely to surpass major European markets in the next four to five years,” he said.

But this projection should be “taken with a grain of salt because the European market shifts much quicker than the US market”, Kann added.

China’s market share is expected to double to 4.5% from 2.2% in 2010 while India’s will also grow to 0.7% from 0.3%, according to the report.

US solar electric installations totalled 956MW in 2010 to reach a cumulative installed capacity of 2.6GW while their total value grew 67% to $6 billion in 2010 from $3.6 billion in 2009.

The US market is the most attractive country for solar investment, according to the latest index compiled by analysis firm Enrst & Young, which attributed the strong growth partly to the DOE’s loan guarantee programme. India retained the second spot while China moved up two spots to third in the rankings. Spain and Italy round out the top five.

Gloria Gonzalez