In 2018, the US solar industry achieved the feat of installing 10.6 gigawatts (GW) of solar PV for the third consecutive year, according to a report by Wood Mackenzie and the Solar Energy Industries Association (SEIA).
The Solar Energy Market in the USA
Again in 2018, large-scale PV plants in the US generated 63 billion kilowatt-hours of power, which was 1.5% of total U.S. power generation as confirmed by the Energy Information Administration (EIA). The EIA further estimated that smaller systems (mostly rooftop), generated another 30 billion kilowatt-hours.
Fig.1: The US Solar Market by PV Installations until 2019 (Source: Wood Mackenzie)
According to Wood Mackenzie, the US is likely to install 3 million solar panels in 2021 and 4 million panels in 2023.
The total number of solar installations in the US is on its way to get more than double in the next 5 years, and it will consolidate the industry and provide economic strength.
Related article: Top Solar Statistics You Need to Know in 2019
The Leading US Cities in Solar Energy in 2019
Fig.2: Leading US States by No.of PV Installations (Source: Wood Mackenzie)
The total solar PV installation capacity in the US is likely to go up by 14% in 2019. Subsequently, in 2021, the total yearly installations can reach 15.8 GW.
Among the US states, California was leading in solar installations during the initial years, and it is still one of the major states. Earlier, California made 51% of the first million solar installations, and 43% of the second million.
Now, other states such as Arizona and New York have gained significance due to their growing solar market.
Also, in recent years, Texas and Florida have emerged in the US solar market and added more capacity than some of the highest solar penetration states. These emerging solar markets are going to be instrumental in the growth of the residential solar market in the US.
In 2018, the non-residential solar PV market witnessed a dip of 8% annually because of policy transitions in major markets. Also, utility-scale solar saw a contraction of 7% in the same year, mainly due to Section 201 tariffs.
Solar Growth Statistics
A report by the International Business Times shows that the US solar industry is likely to witness huge growth in the next 5 years.
In 2018, in the US, the solar PV capacity increased by 10.6 GW, which was in addition to the previous total of 53.8 GW.
The current total capacity of 64.2 GW can power 12.3 million homes in the US By 2024, and the PV capacity is expected to grow more than double.
What are the reasons behind the surge of the solar industry?
The reasons are below:
- The primary potential source to fulfill the growing energy demand
- Strengthens the electricity system
- Cost competitive
- It provides consumers with greater energy control and choice
- Creates jobs.
The Economic Index of the Solar Industry
The surge in the solar industry has significantly boosted the US economy by creating job opportunities. Over 242,000 Americans work in the solar industry, which is more than twice the number in 2012.
In 2018, the solar industry contributed $17 billion as investments in the U.S. economy.
Fig. 3: Jobs in the U.S Solar Industry by Sector (Source: Seia.org)
Investment Statistics – Corporate Solar Investments Surge in the US
The Solar Energy Industries Association’s Solar Means Business 2018 report shows that more than 7,000 MW capacity has been added across 35,000 projects. The report has fetched data from both on-site and off-site installations.
The report further states that there has been a surge in commercial solar investments in the US. For example, the multinational technology company Apple is currently leading the way in procuring corporate solar energy in the country with almost 400 megawatts (MW) of total solar capacity.
Also, retail brands such as Google, Target, Amazon, and Walmart have made it to the top 10 investors in the Solar Means Business 2018 report.
The reason why an increasing number of top companies are investing in the solar industry is that solar energy is clean and reliable and makes perfect economic sense.
Fig. 4: Top 10 Corporate Solar Energy Users in the U.S (Source: seia.org)
Solar Manufacturing Statistics
An interesting fact is that most of the solar panels sold in the US are not manufactured in the country in 2019. Still, several companies such as SunPower, First Solar, and Jinko Solar are making solar panels in the US.
Recently, several Asian companies have begun manufacturing solar panels in the US. The entering of these companies into the US market is likely to make the solar market more competitive for indigenous companies.
On January 22, 2018, the current government announced a 30% tariff on solar panels and cells that are imported into the US. This new policy has raised a lot of questions among solar customers. One of the most popular questions has been, “Where can I buy solar panels that are made in the US?”
Despite the fact that the majority of solar projects in the US use imported solar panels, still, there are quite a few US manufacturers.
Here is a list of solar panel companies that have some or all of their manufacturing units in the US:
List of US Solar Panel Manufacturers (as of 2019)
- Heliene – Mountain Iron, MN
- Mission Solar – San Antonio, TX
- Solaria – Fremont, CA (HQ in the US)
- SolarTech Universal – Riviera Beach, FL
- SolarWorld Americas – Hillsboro, OR
- SunSpark – Riverside, CA
- Silfab Solar – Bellingham, WA
- Seraphim – Jackson, MS (HQ in the US)
- Tesla/Panasonic – Buffalo, NY
There are two notable aspects about these listed US solar panel manufacturing companies:
1.Many of these companies assemble all or some of their solar panels in the US. However, they import the key components from other countries, and these components too, fall under the new solar tariff except for the first 2.5 gigawatts (GW) of solar cells imported in a year.
In 2017, for example, the US had installed 12 GW of solar panels, out of which around 2.5 GW was manufactured in the country.
2. All of the companies listed above do not have their headquarters in the US. Some companies, like Heliene, have headquarters in Ontario, Canada. Others, like SolarWorld Americas, is a subsidiary of SolarWorld Innovations GmbH with headquarters in Bonn, Germany. However, these companies have their solar panel manufacturing units in the US.
Solar Energy Production Statistics
In the first half of 2018, the production of solar energy increased by 25.4%.
The third quarter of 2018 saw output from solar capacity topped 8% of total US electricity generation. It was 7% during the same period in 2017.
In 2019, the growth trend is poised to continue. There will also be changes such as emerging policies supporting renewable growth and increased investor interest in the energy sector.
Also, the implementation of advanced technologies will increase the value of solar energy to asset owners and customers.
As mentioned earlier, solar energy accounted for the largest percentage increase (25.4%) of all renewable energy sources in 2018.
Fig 5: Annual Solar Energy Production in the US (Source: eia.gov)
Tax Credits Statistics
The Solar Investment Tax Credit or ITC has boosted the solar industry in the US by providing stability and growth since it was rolled out in 2006.
During the past decade, the solar industry has grown at an average annual growth rate of 50%.
Before the potential expiration of the ITC in 2006, there was a spike in solar installations. Later the extension given in late 2015 has created stable federal policy around solar energy through 2021.
Fig 6: Annual Solar Installations after in the U.S after ITC ( Source: seia.org)
The implementation of the ITC has been quite successful as it has increased installations and lowered the costs of small-scale solar systems.
The ITC offers a 30% tax credit without any upper limit for solar systems on both commercial and residential properties in service between January 1, 2006, and December 31, 2016. Since the implementation of ITC in 2006, annual solar installations have increased at a compound annual rate of 76%.
The benefits of implementing the ITC is already showing. It has encouraged companies to develop long-term investments that will make the market competitive and drive technological innovation. It will eventually result in lowered costs for consumers.
ITC, coupled with the US Production Tax Credit (PTC) was rolled out as a federal incentive to provide financial support for developing large-scale renewable energy facilities. The policy was implemented for solar electricity systems that were larger than 150 kW placed between October 22, 2004 and December 31, 2013. Qualified projects received 1.1¢/kWh tax credit during the first 10 years of operation.
Soft Costs Statistics
In the US, small commercial and residential solar businesses have the biggest cost-decline opportunity. Soft costs include:
- The cost of installation
- Relevant permits
- Customer acquisition
- Supply chain
- Other overhead costs such as marketing/sales and administrative costs.
The US Department of Energy has been instrumental in reducing soft costs. Besides, SEIA and the Solar Foundation are working on two programs to bring down local obstacles that come in the way of going solar.
Fig. 7: Residential Solar PV System Pricing in the U.S (Source: seia.org)
In Q1 of 2019, the US solar market installed 2.7 GWdc of solar PV, which is a record number in any Q1 ever. This growth is expected to continue in the coming months and years.
The Solar panel market, which includes Poly-crystalline, Mono-crystalline, and Thin-film Solar Panel for both commercial and residential usability, will see positive growth.
Solar panels convert solar energy to produce clean and efficient electricity. Due to this reason, commercial demand for solar panels is increasing significantly in the US, and likely to spike further growth of this industry.
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Solar photovoltaic manufacturers must be starting to breathe again. Over the past few years, they’ve struggled to keep their heads above a tide of overproduction that’s been washing out weaker competitors and strengthening others. Now, a growing body of evidence shows that the tide is changing. Case in point, a new report from Lux Research anticipates that the solar market will recover by 2015 and grow to a $155 billion annual industry by 2018.
The report anticipates that the PV market will start seeing a healthy 10.5 percent compound annual growth rate (CAGR) by 2018. “In the most likely scenario, the PV market will grow at a modest clip to 35 GW in 2013 before rapidly ramping up to 61.7 GW in 2018.” That’s about double the 31 gigawatts installed in 2012.
“We predict oversupply to end in 2015,” says Lux Research’s Edward Cahill, a research associate with the company and lead author of “Market Size Update 2013: Return to Equilibrium”. He adds, “Manufacturers will still struggle through 2013 and 2014, but 2015 will bring a resurgence in gross margins, which is when they will have money to spend on new equipment and technologies and thus solar’s great recovery.”
The report states, “Record low prices from gross margins reaching near zero or below have made solar installations competitive in more markets. The US, China, Japan, and India will take over where Germany and Italy left off, driving global demand from 31 GW in 2012 to 62 GW in 2018.” The low PV prices also weeding out the uncompetitive manufacturers as consolidation reduces global capacity, it says. “Rising demand and falling capacity will bring the two within 12 percent of each other in 2015, easing price pressure, returning manufacturers to profitability, and returning the industry to equilibrium.”
“Low prices makes solar more competitive in more markets, increasing demand,” Cahill explains. “Low prices also make manufacturers sell near or below 0 percent margins. As these trends continue, demand increases and supply decreases. This will alleviate some prices pressure and enable companies’ gross margins to increase. However, costs are also coming down, meaning prices will likely stay flat while margins increase and costs decrease.”
In creating the report, Cahill and Lux analyzed the levelized cost of energy (LCOE) in 156 geographies, which it says accounts for 82 percent of the world’s population. While PV installations grew from 27 gigawatts in 2011 up 77 percent from the year before, it slunk to a 15 percent growth rate in 2012. The report states, “If demand continues to slow and even slide from subsidy cuts in Europe, overcapacity will continue to erode margins, large manufacturers will fall, and solar could become a niche technology. However, installations and market conditions will improve, resulting in 11 percent CAGR through 2018.”
Silicon PV will remain the dominant form of PV, but thin-film PV may also start to grow again, according to Cahill. Many thin-film companies have failed over the past few years—like Solyndra and Abound Solar—in the face of silicon PV price drops. But, he contends, “Thin-films will survive in their own target markets.”
First Solar’s cadmium telluride is still the cost leader will keep doing well in the utility-scale market and he anticipates that CIGS (copper indium gallium selenide) can improve. “If it can accelerate cost reductions as CIGS players predict and improve module efficiency, it will have a play, especially on commercial rooftops where it can be cheaper and high efficiency is not as crucial as for residential rooftops.” He’s not so charitable to amorphous silicon PV. “Amorphous silicon will be a victim of hyper-competition and will not survive in traditional PV markets due to high costs from poor manufacturing yield and module efficiency.”
Greentech and SEIA’s U.S. Solar Market Insight 2014 Year in Review had more expected good tidings, including for total U.S. installed solar capacity, which nows stands at 20 gigs and rising. Concentrated photovoltaic also got a moment in the sun, posting its largest ever year with 767 megawatts thanks to the completed projects like Ivanpah, Genesis Solar and Mojave Solar.
But there is also some bad news to deliver, from the usual suspects. “Only natural gas constituted a greater share of new generating capacity,” the report reminded. There is also a global perspective worth considering: In the same year, China added 10.6 more gigawatts, handily beating America with 28 total installed. If America is only as green as its toughest competitor, then it needs to power up its game to level up to Asia.
But wet international blankets aside, 2014 remains “the largest year ever in terms of PV installations,” Greentech and SEIA’s executive summary explained, forecasting that installations will sprint past 8 gigawatts next year, which is 59 percent higher than 2014. “Growth will occur in all segments, but will be most rapid in the residential market.”
Leaping over legislative hurdles will be the next test for that exponential residential market, which is heating up even faster now that U.S. solar titans like First Solar, SunPower and SolarCity are launching yieldcos, solar bonds and other incentives for homeowners to solarize. Last year’s supernova growth in the solar sector was, as the report explained, “driven primarily by the utility solar PV market.” But for the first time ever, it added, “more than half a gigawatt of residential solar installations came on-line without any state incentive in 2014.”
If homeowners and investors can avoid or repeal the various solar taxes and tariffs coming their way from what influence the fossil fuel industry has left, then the residential solar market will only more greatly increase in value and power. I want to read that report.
Signaling the growing importance of solar energy to America’s future, the widely read and cited annual “State of American Energy Report” – released today by the American Petroleum Institute (API) – includes, for the first time ever, a comprehensive section on the rapid growth of the U.S. solar energy industry and its impact on our nation’s economy and environment.
According to the report, which included an assist from the Solar Energy Industries Association (SEIA), solar is now the fastest-growing source of renewable energy in America. “Today, the U.S. has an estimated 20.2 GW of installed solar capacity, enough to effectively power nearly 4 million homes in the United States – or every single home in a state the size of Massachusetts or New Jersey – with another 20 GW in the pipeline for 2015-16.”
The report went on to say, “Solar energy is now more affordable than ever. According to SEIA/GTM Research, national blended average system prices have dropped 53 percent since 2010. Today, the solar industry employs 143,000 Americans and pumps more than $15 billion a year into the U.S. economy. This remarkable growth is due, in large part, to smart and effective public policies, such as the Solar Investment Tax Credit (ITC), Net Energy Metering (NEM) and Renewable Energy Standards (RES).”
The impact of solar energy on the environment has been equally impressive. “Solar helped to offset an estimated 20 million metric tons of harmful CO2 emissions in 2014, which is the equivalent of taking four million cars off U.S. highways, saving 2.1 billion gallons of gasoline or shuttering five coal-fired power plants,” the report stated. “When looking at America’s energy future, solar can be a real game changer, providing more and more homes, businesses, schools and government entities across the United States with clean, reliable and affordable electricity, while also helping states to meet proposed new obligations under Section 111(d) of the Clean Air Act.”
Most importantly, the report predicted strong, continued growth in all sectors of the U.S. solar industry – residential, commercial, utility-scale and solar heating and cooling – over the next two years.
“The United States is in the midst of a new era in domestic energy abundance characterized by rising use of renewable energy and increased oil and natural gas production that is strengthening our economic outlook and enabling America to emerge as a global energy superpower,” said API President and CEO Jack Gerard. “It’s a remarkable transformation that has been made possible because America is uniquely rich in energy resources, a talented workforce and cutting-edge energy technologies.”
“Solar energy is one of America’s great success stories,” said SEIA President and CEO Rhone Resch. “Last year, solar installations were 70 times higher than they were in 2006 – and today there’s nearly 30 times more solar capacity online nationwide. We’ve gone from being an $800 million industry in 2006 to a $15 billion industry today. The price to install a solar rooftop system has been cut in half, while utility systems have dropped by 70 percent. It took the U.S. solar industry 40 years to install the first 20 GW of solar. Now, we’re going to install the next 20 GW in the next two years. In fact, during every single week of 2015, we’re going to install more capacity than what we did during the entire year in 2006. Any way you look at it, solar energy is paying huge dividends for the economy, our environment and America’s future.”
Read more on SEIA.org
2012 is starting to peak around the corner and people, and companies are starting to make their projections for what the New Year will bring.
Residential third-party ownership company SunRun has stepped forward with its projections for 2012, which include Darwinian industry consolidation, led by increased competition among many sectors of the solar industry. That being said, SunRun is optimistic about its opportunities in 2012.
The company projects that in 2012 solar players will have to evolve, innovate or become irrelevant and fail. That will be led by PV module price drops, which SunRun said could fall up to 20 percent more in 2012—putting even more competitive pressure on manufacturers to lower costs. The potential end of incentives like the 1603 Treasury Grant Program will impact project developers and installers. Both price-drops and the end of incentives will foment industry consolidation, which could cause some painful consolidations but also will illustrate who the industry leaders are.
“Without the grant program consumers lose out because clean energy becomes more expensive and less accessible,” said SunRun spokesperson Susan Wise. “As a market leader we will continue our success without the grant program, but we prefer that it be extended so we can offer the most affordable solar to more homeowners and more middle-class families.”
On the more positive side, SunRun anticipates that advances in streamlining permitting processes and non-PV technologies will also help reduce the cost and barriers to solar installations.
The Department of Energy recently announced winners of its Rooftop Solar Challenge, an effort to streamline solar permitting for homeowners across regions.
“You are likely to see progress in these regions, among others,” Wise said.
New advances in software to support solar will also help reduce costs.
“Companies like SunRun, SolarCity and Sungevity use the Internet and other programs to evaluate the solar potential of a homeowners’ roof,” she said. “We also expect increased use of software to streamline permitting, such as downloading and submitting permits electronically.”
The coming year also is likely to see an increase in homeowners with solar through third-party ownership.
“Solar leasing options could become 75 percent of the California residential solar market in 2012, with other states following suit,” Wise said.
The company could also enter new markets next year, according to Wise.
“New market entries depend on a number of factors including price of electricity in a particular state and the existence of supportive and fostering policies,” she said. “But expansion is the goal.”
But how 2012 will actually shake out and whether 1603 will be extended and other incentive programs remains to be seen.
The difficulties that the global solar industry experienced in 2012 were both clear and expected. Continuing excess solar photovoltaic (PV) manufacturing capacity spurred a collapse in prices across the PV value chain, creating consistently negative margins and negative profitability for upstream PV manufacturers.
This led to a large number of bankruptcies, insolvencies and acquisitions, but also trade wars between the United States and China, the EU and China, and between India and everyone else.
However, as in 2011 these difficulties masked the continued progress in PV markets, policy and technology. Many of Solar Server’s predictions for 2012 played out, including the increasing diversification of global PV markets and the dramatic expansion of a number of emerging markets in 2012.
A difficult year: falling prices
The most fundamental problem of the global PV industry in 2012 was, and continues to be, too much manufacturing capacity for global demand. Exact numbers are hard to come by, given the difficulty in information collection in China, where much of the new capacity is located. However, Greentech Media estimated that in 2012 global PV module manufacturing capacity reached nearly 60 GW, with global polysilicon, wafer and cell capacity more than 40 GW each.
This represents a module capacity roughly double the estimates of the 2012 PV market. Given that large inventories are still left over from 2011, a continuing collapse in prices was inevitable.
- Polysilicon spot prices fell an estimated 47% in 2012
And fall they did, across the PV value chain. In the first 11 months of 2012 crystalline silicon module spot market prices had fallen between 19% and 29%, with Chinese crystalline silicon modules falling to EUR 0.56 (USD 0.74) per watt, according to Sologico. This follows on a price fall between 36% and 46% from January 2011. In just two years, Chinese c-Si modules are being sold for a little more than a third of their previous market value per watt.
Polysilicon spot prices likewise fell an estimated 47% globally in 2012 to a low of USD 15.3/kg, with Xinhua reporting a fall of more than 50% in China, as the second straight year of price collapse. While much polysilicon is sold through long-term contracts, the collapse in polysilicon prices has eroded the contract market, making manufacturers more willing to depend on the spot market.
Wafer and cell manufacturers have reported similar stories. The net result is that the only large PV manufacturers reporting positive operating margins in 2012 are those who have diversified into PV project development.
- PV equipment manufacturing revenues fell 72% to USD 3.6 billion in 2012
Perhaps the worst hit are makers of PV manufacturing equipment, who have seen orders collapse over the past six quarters. While some orders continue for upgrades, most expansions have been halted. SEMI’s most recent report found that PV equipment bookings remained flat in the third quarter of 2012 at only USD 234 million, 56% below a year prior, and Solarbuzz reports that global sector revenues fell 72% to USD 3.6 billion over the full year 2012.
Again, diversification has been key, and those players that have survived often have multiple product lines in multiple industries to soften the impact of the collapse in PV equipment demand.
Bankruptcies, insolvencies and acquisitions
The fallout of the collapse in profitability has been a large number of bankruptcies, insolvencies and acquisitions among PV manufacturers. The largest of these was Q-Cells’ insolvency and subsequent sale to Hanwha Chemical Corporation, a major fall from its position as global PV market leader in 2008.
However, Q-Cells was the tip of the iceberg. Mercom Capital has counted 35 solar bankruptcies or insolvencies in 2012, and 50 restructuring or downsizing announcements, including major workforce reductions at SMA and Schott’s departure from crystalline silicon PV manufacturing.
- REC closed the last of its wafer production in Norway during 2012 (Image courtesy REC ASA)
While much noise was made about the US PV industry, the United States never had a very large scale of PV manufacturing to begin with. Instead, Europe was the hardest hit, particularly silicon wafer production. REC ASA completely shut down its wafer division at three locations in Norway during 2012, with Schott and PV Crystalox closing wafer facilties in Germany.
Chinese manufacturers also spilled considerable red ink during the year, however none of the large Chinese PV companies have failed yet. Instead, Chinese manufacturers have posted worse and worse balance sheets, have received minor bailouts from government entities, and in some cases have sold off portions of their businesses to state-owned enterprises.
Global trade war
The global solar trade war which erupted in 2012 must be seen in light of these extremely difficult conditions. Prompted by a coalition led by SolarWorld, the United States slapped anti-dumping and countervailing duties of 24% – 255% on Chinese-made PV cells, and modules made from those cells. However, these tariffs have been easy to avoid, given the option to outsource cell production and the relatively small size of the US PV market.
- The trade investigation before the European Commission has the potential to impact the global PV industry much more than US tariffs (Image courtesy jlogan)
Much more serious is an EU investigation into imported Chinese PV products, which is currently underway. Meanwhile, China has not sat idly by while all of this has occurred. It has launched an anti-dumping investigation of its own into US and EU polysilicon, from which 30-50% tariffs are expected.
Not to be outdone, India has also responded with anti-dumping investigations into PV products, naming China, Malaysia, Taiwan and the US.
While many in the industry have opposed these trade actions, the extremely difficult positions that US and EU PV manufacturers and Chinese polysilicon producers have found themselves in is undeniable. What is more difficult to establish is the intentional damage alleged by some claimants. In the end, there is simply too much capacity for the market.
The good news: A growing PV market
Despite all of the difficulties which manufacturers are facing, the global PV market continued to grow by 10% – 17% in 2012 to an estimated 31 – 33 GW, with growth even in highly mature PV markets like Germany. The latest figures from the German Ministry of the Environment indicate that despite feed-in tariff cuts, Germany’s 2012 PV market reached 7.6 GW by the end of the year, another world record for annual PV installed.
The Italian market for large commercial and utility-scale PV has been effectively killed by the near-elimination of the feed-in tariff in the fifth Conto Energia, but as this came in August, Italy will still post impressive 2012 installation figures, estimated by Mercom at 3.5 GW.
However, other trends indicate that the big story will not be in Europe anymore.
Asian PV markets rise
In our 2011 year in review, Solar Server noted the passage of feed-in tariffs in China and Japan as among the most important trends in the global solar industry. In 2012, we have not been disappointed.
- China installed an estimated 5 GW of PV in 2012, making it the world’s second-largest PV market (Image courtesy Astonergy)
It is likely that the Chinese PV market more than doubled again this year. While final numbers are not in, IMS Research’s October 2012 prediction of 5 GW installed in 2012 would make China the world’s second-largest PV market. This includes not only installations under the feed-in tariff, but also 1.7 GW of projects under the nation’s Golden Sun Program.
Japan likewise has seen an extraordinary boom in PV installations, driven by what may be the world’s most lucrative feed-in tariff and a need to put generation online to replace shuttered nuclear power plants and reduce costly fossil fuel imports.
Mercom Capital estimates that Japan’s PV market doubled to 2.5 GW in 2012. Also, JPEA found that the nation’s PV cell and module imports increased more than 300% year-over-year in the third quarter of 2012 to 32% of the total market, as Japan’s PV manufacturers struggled to meet this sharp increase in demand.
China and Japan were hardly the only markets that grew dramatically in 2012, as PV technology continued its viral growth across the globe. While both India and the United States showed impressive growth during the year, the growth in other emerging markets in 2012 may indicate a more significant trend over the next decade.
Throughout 2012 there were frequent announcements of utility-scale projects either initiated or completed on six continents, including locations as unlikely as Costa Rica, Ghana, Kazakhstan, Nigeria and Peru.
Of these emerging markets, one that is notable for its size is South Africa. The end of 2012 was filled with a flood of project groundbreakings and supply deals for the 1.45 GW of PV plants which were approved under the first phase of the nation’s Renewable Energy Independent Power Producer Program (REIPP), which aims to install 8.2 GW of PV by 2030.
Other notable regions include Southeastern Europe. While Romania installed only 29 MW, the Greek and Bulgarian markets were much more impressive. A number of large PV plants came online in both nations during 2012, including a 50 MW PV plant built by Astronergy and a 60 MW PV plant built by SunEdison in Bulgaria in 2012.
- Chilean Energy Minister Jorge Bunster at the Calama 3 PV plant. While more than 3.1 GW of solar projects have received approval, the nation had only 2.4 MW of utility-scale PV commissioned by the end of 2012. (Image courtesy Chilean Ministry of Energy)
Many had higher expectations for Latin America. Chile has built an impressive pipeline of over 3.1 GW of solar projects which have received environmental approval, but the nation reached only 2.4 MW of installed utility-scale PV capacity by year’s end, with another 2.5 MW under construction.
Peru showed greater progress, with four PV plants 20 MW and larger, totaling 84 MW, commissioned during 2012. AES Solar also commissioned a 24 MW PV plant in Puerto Rico, one of several utility-scale projects underway in the island territory.
Also this year two very large projects were announced in sub-Saharan Africa. Blue Energy announced plans to build a 155 MW PV plant in Ghana, and Helios Energy signed an MOU with a state government in Nigeria to build a 30 MW PV plant.
Technology progress: CPV
- At 30 MW, the Alamosa Solar plant is much larger than any previous CPV plant (Image courtesy Amonix)
As predicted by Solar Server at the beginning of 2012, during the year concentrating photovoltaic (CPV) technology continued its progress into the mainstream. In April, Cogentrix commissioned a 30 MW CPV plant in the US state of Colorado, the Alamosa Solar project. The plant is many times larger than any existing CPV installation, and was featured by Solar Server as our November 2012 Solar Energy System of the Month.
Also, in December 2012 Soitec announced the long-awaited opening of its CPV factory in Southern California, which will supply modules for hundreds of megawatts of plants under contract which are based on its Concentrix technology.
CPV also saw new technical achievements in 2012. In October 2012 Solar Junction announced that it had reached 44% cell efficiency with its multi-junction technology, and in the same month Amonix reported that it had achieved a 33.5% outdoor efficiency with its CPV modules.
CPV still faces many challenges, most notably bankability. However, 2012 saw important progress for CPV, with more growth expected in 2013 as developers begin work on large projects in South Africa and California.
2013 and beyond
Given the fundamental underlying problem of overcapacity, the difficulties faced by the PV industry in 2012 are far from over. Multiple research firms have forecast an ongoing fall in sale prices in 2013, and IHS has made the particularly grim prediction that the number of companies in the PV supply chain will be reduced by 70% over the course of the year.
However, these falling prices have aided market growth, particularly in nations such as the United States, and have benefited developers and installers.
Global PV markets continue to grow and diversify, and with this diversification comes new opportunities, including in those markets which were previously considered closed to outsiders.
NPD Solarbuzz has predicted significant opportunities in the PV balance of systems market in China, and Japanese industry data shows that despite the cultural preference for domestic products in the nation, the share of imported PV is growing rapidly in Japan.
- The center of the global solar market is moving towards Asia (Image courtesy Solar Frontier)
In other nations, falling prices mean that PV is finally becoming cost-competitive without subsidies, as has been shown by successful “grid-parity” projects underway in Spain. 2013 promises to be another difficult year. However, for the companies that survive, there are excellent prospects for substantial long-term growth in the PV industry. We can look forward to a new PV market that is both more global and more stable, less prone to strong quarter-to-quarter changes and less dependent upon boom-and-bust cycles in individual nations.
by Solar Server International Correspondent Christian Roselund
There is a rush for renewable energy in southeastern California. Tehachapi-Mojave has enormous gifts of rich wind and golden sun, as well as other unique characteristics, that has the region at the edge of something as extraordinary as 1849’s Gold Rush.
Right now, the Tehachapi Mountains host the state’s biggestcircumscribed installed wind capacity and the Mojave Desert is home tothe state’s only solar power plants, a set of trough facilities fromKramer Junction to the border and a solar power tower in Lancaster.
But those installations are mere gestures at what will eventually fill a region that has what has been called “one of the great insolations inthe world” and “the state’s biggest wind potential” and “wind that peaks during peak electricity demand.”
The California Energy Commission (CEC) is in the process of definingthe region’s real potential as the state prepares its march to theobtaining of 33 percent of its power from renewables by 2020 and muchmore in subsequent decades.
“33% is an initial or interim goal,” Michael Valentine, the Assistant Director of the CEC’s Desert Renewable Energy Conservation Plan (DRECP), and Roger Johnson, CEC’s Transmission Corridor Designation Manager, explained. And “the desert is a big part of California’s renewable energy future.”
The Tehachapi-Mojave region has roughly 1,000 megawatts (MW) ofinstalled solar and wind capacity, according to Valentine and Johnson.There are 410 MW of solar, over 350 MW in the nine NextEra-operatedSolar Energy Generating System (SEGS) trough facilities, 5 MW in theeSolar power tower and the rest in smaller, county-approvedinstallations harder for CEC to track.
Tehachapi’s Alta Wind Energy Center (AWEC) and the other projects adjacent to it probably have, according to CEC numbers, some 550-to-600 MW in actual operation, though the developerssay it is closer to 710 MW – but that installed capacity is merely theproof of product.
Already approved and at some stage of construction, Valentine andJohnson reported, are 7 solar projects representing 1300 MW of peakcapacity and 6 large wind projects with an installed nameplate capacityof 1700 MW. Those 13 developments, though, were only the ones out infront of the Gold Rush.
The hardcore rush may best be represented by the projects now in the permitting process.
“In permitting in 2011,” Valentine and Johnson reported, are “61 solar projects for 3,340 megawatts and 20 wind projects for 2500 megawatts.”
Valentine and Johnson insisted these numbers be considered estimatesbecause so many factors are at play, ranging from Governor Brown’s drive for development to the region’s unabashedly vocal NIMBYs(Not-In-My-BackYard) and BANANAs(Build-Absolutely-Nothing-Anywhere-Near-Anything) who could get in theGovernor’s way (unless they get their fair share of the gold).
Renewable energy sources (biomass, geothermal, solar, water, wind)accounted for 4.2% of U.S. electrical generation during the firstthree-quarters of 2010, according to the latest US Energy InformationAdministration (EIA) “Electric Power Monthly.
Compared to the same period in 2009, renewables – including hydropower – grew by 2.2%. While conventional hydropower dropped by 5.2%, non-hydrorenewables expanded by 16.8% with geothermal growing by 4.9%, biomass by 5.5%, wind by 27.3%, and solar by 47.1%.
Non-hydro renewables accounted for 3.9% of total electrical generationfrom January 1 – September 30, 2010 — up from 3.5% the year before.
Net generation in the US rose 5.4% from September 2009 to September2010. The rise in coal-fired generation was the largest absolutefuel-specific increase during the perod, up 8.4%.
Year-to-date, coal plants contributed 45% of the power generated in theUS, followed by natural gas at 24.2%, and nuclear at 19.3 percent.Conventional hydro supplied 6.3%, and renewables (biomass, geothermal,solar, and wind) generated 4.2%.
At least that’s how he ranked his number one wish while describingclimate change as the world’s greatest challenge to a rapt audience atthe TED conference last week. Just weeks after lending his voice to a growing “innovation consensus” by writing on his blog, Gates Notes, that innovation, not just insulation, must be the focus if we are serious about “getting to zero,” Gates’ TED speech expanded on what we need to get there:
“Weneed energy miracles. The microprocessor and internet are miracles.This is a case where we have to drive and get the miracle in a shorttimeline.”
Gates emphasized the need for an energymiracle portfolio that includes carbon capture and storage and nuclearas well as wind and solar. According to CNN’s coverage of the conference(the video is not posted yet), Gates showed particular interest in thepotential for nuclear waste reprocessing as a source of clean, cheapenergy.
He also set 2050 as the deadline for reducingcarbon emissions to zero and outlined a tight innovation and deploymenttimeline: 20 years to innovate, 20 years to deploy.
The GatesFoundation typically invests its resources in issues related to publichealth and poverty, not climate change and energy, which is why Gates’unprecedented speech could be a game changer for two important reasons.
The first is that Gates has come to realize that the reducingthe carbon intensity of energy is the only feasible way to achieve azero-carbon world. In an article about Gates’ talk for AlterNet, Alex Steffen explains that Gates presented the following equation to explain how he arrived at this conclusion.
CO2 = Population x Services x Energy x Carbon
Steffendubs this the “Gates Climate Equation,” though regular readers of thisblog will also recognize it as a simplification of the Kaya Identity,which looks like this:
Carbon emissions = Population x Per capita wealth x Energy intensity of the economy x Carbon intensity of energy
Whatever you call it, the conclusion is the same: in a world with increasing population that values greater economic growth, reducing carbon emissions means fueling development with clean energythat is cheaper than incumbent fossil fuels. As Gates has written,energy efficiency can help, but getting to zero carbon will requiremajor innovation if we want abundant carbon-neutral energy.
Thesecond reason why Gates’ opinions are so poignant, is that he defines aclear need for investment in clean technology innovation, notablyasserting that current technologies are not sufficient despite Al Gore,the main flag-bearer of the phrase, “We have all the technology weneed,” being in attendance.
According to Gates:
“Allthe batteries we make now could store less than 10 minutes of all theenergy [in the world…So, in fact, we need a big breakthrough here.Something that’s going to be of a factor of 100 better than what wehave now.”
As a respected innovator andphilanthropist, Gates’ opinions may help drive home an aspect of theclimate change/clean tech debate that is often underappreciated, or atleast, easily overlooked: scale.
We have grappled with the scaleof both the climate challenge and the energy challenge via our writingand admittedly, they both seem overwhelming. But while Gatesacknowledges that the solutions are complicated – clean technologyinnovation and implementation will not be easy, especially in such ashort time frame – the ultimate goal to overcome both challenges isclear: make clean energy cheap, and fast.
Originally posted at the Breakthrough Institute
“I am thrilled to announce that the solar energy industry is now thefastest growing industry in America,” said Solar Energy IndustriesAssociation (SEIA) CEO Rhone Resch today at the opening general sessionof PV America Conference 2011 in Philadelphia.
“Let me repeat that. The solar energy industry is the fastest growing industry in America. We are growing faster than wind energy, fasterthan telecommunications, and, thank goodness, we are even growing faster than the mortgage foreclosure industry,” he said.
The industry experienced year-over-year growth in 2010 of 67 percent, based on sales of installed solar, said SEIA spokesperson MoniqueHanis. The figure is from SEIA and GTM research’s “2010 U.S. Solar Market Insight: Year in Review.” “We haven’t found any other industry that grew faster,” she said.
“We are seeing unprecedented geographic diversity as well. I like tocall this my Sweet Sixteen map. Last year, 16 states installed more than 10 MW; that’s up from 4 states in 2007,” Resch said. “Already, theMid-Atlantic region is beating California as the largest market in theU.S. for PV installations,” he said.
The U.S. solar industry also is poised for more growth in the comingyears. The Mid-Atlantic and Northeastern U.S. will have need for morethan 3 gigawatts of new photovoltaics by 2015, Resch said.
“Think about it,” he said. “That’s enough solar to power more than half a million homes.”
That’s just one region of the country.
“Right now, there’s a total of 23 gigawatts of solar projects acrossthe U.S.,” Hanis said. Over the next four years, the majority of thegrowth will occur in the southwest as huge utility-scale projects comeonline, according to Hanis.
“The message is really about diversification across the U.S.,” Hanissaid. She pointed to growth for the various solar technologies, likeconcentrated solar power, solar thermal and photovoltaics, and also togrowth in the installations in the various markets.
Despite the growth, issues still threaten the industry’s vitality, according to Resch.
Financing issues are the chief concern, he said. To address the issue, SEIA is advocating for a multi-year extension of the 1603 program, establishing a Clean Energy Bank to provide long-term low costfinancing, making modifications to the tax code encouraging investmentsin solar, developing a national clean energy standard and allowing thefederal government to enter into power-purchase agreements.
Renewable power capacity reached 280 GW in 2008, rising 75 percent from 160 GW in2004. The top six countries in terms of total renewable generatingcapacity were China (76 GW), the United States (40 GW), Germany (34GW), Spain (22 GW), India (13 GW) and Japan (8 GW).
In 2008, the United States and the European Union added morerenewables capacity than power capacity from conventional power likenatural gas, coal, oil, and nuclear. In other words, renewablesrepresented more than 50 percent of total added capacity.
Is carbon dioxide a pollutant like lead, mercury, and particulates? Should the EPA regulate it as a result? These two questions are verytough to answer due to both the legality and the complexity of thecarbon dioxide issue. In particular, carbon dioxide is a source thatcomes from many different sources and EPA regulation might beproblematic for some states and industries which are fossil fueldependent. Consequently, whether the EPA should regulate carbon dioxide emissions is not going to be a clear-cut or easy answer because itdepends on many factors.
First and foremost, whether EPA should regulate carbon dioxide emissions depends on whether Congress is willing to do so. The failure of theWaxman-Markey climate bill in the Senate suggests that the answer isperhaps not. In particular, EPA administrator Lisa Jackson, opened thedoor to “reconsider a Bush administration decision not to regulate carbon dioxide emissions from new coal-burning power plants.The White House signaled that it fully supported Ms. Jackson’s approach,deferring to her to discuss the administration’s response to the SupremeCourt case Massachusetts V. EPA.”ThisSupreme Court case stated the EPA has the right to regulate carbondioxide emissions so the question of whether the agency has the legalauthority to do so is not going to be an issue.
However, despite the most recent failure with Waxman-Markey and thekicking of the issue down the road at least at the congressional level,it appears the Obama administration unlike its predecessor is willing to use the EPA to regulate carbon dioxide as a pollutant, which itcertainly is. Yet, Congress particularly Representative John D Dingell “said that the regulation of carbon dioxide emissions by the EPA would set off a ‘glorious mess’that would resonate throughout the economy.'” In essence, it is prettyclear having the EPA regulate carbon dioxide would not be preferable asthey may have a one-size-fits-all approach to carbon dioxide regulations without taking into account individual state needs. In the case ofRepresentative Dingell of Michigan, his state is home to the autoindustry and his concern is how such regulations would impact jobs inhis state.
Nevertheless, carbon dioxide is a pollutant and Congress had theirchance to regulate it with Waxman-Markey or some similar legislation. However, due to Congress’ inability to come to a solution on how toregulate carbon dioxide, the issue remains unresolved legislatively even though many acknowledge it is a pollutant that should not gounregulated. The EPA may need to regulate carbon dioxide in the absence of congressional action. Perhaps they can do so by having flexibleregulatory rules and structures in place to take into account individual state needs. However, for too long Congress has not been able to act,so may be it is time for the EPA to do so in its absence.
What shouldn’t be missed about Chinese President HuJintao’s visit to the United States this week are the deals cut onclean energy among U.S. and Chinese companies and continuingcollaboration between the two countries. Cooperation on clean energybetween the world’s two largest economies represents a win-win for thetwo countries. The clean energy agreements on technologies such ascarbon capture and sequestration and natural gas provide billions ofdollars in sales and export content. They benefit large and small U.S.companies while helping China grow in a more sustainable manner.
While this collaboration is undoubtedly good, the United States isslowly losing its competitive edge in clean energy technology. HSBC bank projects that the global low-carbon market will triple to $2.2trillion by 2020 as investor uncertainty is replaced with optimism that governments around the world will seriously begin to tackle climatechange. But it points to the United States as a “significant outlier” in establishing low-carbon growth policies because of its failure topass clean energy and climate legislation amid conservative attacks inCongress, which threaten to roll back existing authority to limitpollutants through the Clean Air Act.
Lack of U.S. clean energy policies and threats to rollback existingregulations increase investor uncertainty and reduce domestic demand for these technologies. This threatens clean energy technology innovation in our country—to the extent that we may well miss this next industrial revolution. The United States can’t afford to fall behind ininnovation and lose job-creating opportunities. We must strengthen andenact clean energy policies to drive demand and innovation so that wecan remain competitive in this emerging worldwide market and boostdomestic economic growth. China, Germany, and other countries are surging ahead in the clean energy race.
In short, the United States is falling behind. Cooperation with China is a positive step, but it isn’t enough. We also need to compete bymatching the carbon-related reforms now being undertaken by othernations.
U.S.-China agreements total $45 billion in increased exports
Before detailing those imperatives, however, let’s look at what wegained this past week. Leading up to President Hu’s visit, U.S. andChinese companies approved cooperative agreements, many of which accelerate clean energy technology. They are worth over $45 billion in increased exports. General Electric Co., for example,signed a joint agreement for gas turbines in China resulting in $500million in sales and generating $350 million in U.S. exports.
The commercial agreements coincided with the expansion of partnerships on clean energy and climate between the United States and China that were announced in November2009. Notable is the signing of joint work plans that establish aresearch agenda for the $150 million U.S.-China Clean Energy Research Center focusing on energy efficiency, clean coal, and clean vehicles.
U.S.-China clean energy collaboration will generate economic growth
The White House estimates that the recently announced U.S.-Chinadeals will help support 235,000 jobs in the United States. But there are many other opportunities for job creation through cooperation.
The Center for American Progress, for example, found that U.S.–China cooperation to accelerate deployment of carbon capture andsequestration technology could create as many as 940,000 direct and indirect jobs in the United States by 2022.
A recent “U.S.-China Clean Energy Cooperation Progress Report” by the U.S. Department of Energy summarizing cooperation with Chinaunderway concluded, “Our clean energy partnership with China can helpboost America’s exports, creating jobs here at home, and ensure that our country remains at the forefront of technology innovation.”
The United States risks losing more of the clean energy market share to China
But the United States needs to do more at home. Ernst and Young ranks China as the world leader in the global renewable energy market. This is in large part because of its clean energy policies that are rooted in an understanding that investments in low-carbontechnologies will lead to economic prosperity and energy security.
The United States does not have these kinds of policies in place. We need an energy policy with a strong manufacturing component to maintain our leadership position in technology innovation. This is critical to economic growth and job creation. Private investment in low-carbontechnologies and business growth won’t happen without demand for cleanenergy. A clean energy standard or Environmental Protection Agencyregulations can provide that demand.
Some want to move us in the opposite direction, however. TheRepublican Study Committee, for example, is proposing several damagingbudget cuts, including ending the Manufacturing Extension Partnershipprogram, or MEP, to save $125 million annually. This is short-sighted.MEP helps small and midsize companies enhance energy efficiency andcreates or saves 50,000 manufacturing jobs per year. Similarly, conservatives want to gut applied energy research at theDepartment of Commerce and block the Environmental Protection Agencyfrom keeping our air clean.
Policies that would keep us the leader in the clean energy race
Instead of killing MEP, cutting innovative research and turning back the clock on environmental laws, Congress should maintain, extend, and enact policies that will give the United States a competitive edge inthe worldwide low-carbon market.
These include but are not limited to the following:
- Increase funding for the MEP program
- Extend the manufacturing tax credit, or 48c, with an additional $5billion in tax credits to help manufacturing companies become moreenergy efficient
- Eliminate wasteful tax breaks for oil companies and spend the $45 billion saved on research, development, and deployment of clean energy technologies
- Create a Clean Energy Deployment Administration, or “Green Bank,” to reduce the risk of clean energy investment and accelerate the manufacturing and deployment of clean energy technologies
- Establish CLEAN contracts incentivizing investment in renewable energy generation with long-term fixed-rates contracts
- Preserve demand certainty for clean energy technologies through the Environmental Protection Agency’s regulations of greenhouse gases andother pollutants
- Restore funding to the Department of Energy’s loan guarantee program, which is necessary for the development of clean energy technologies
Taking these steps would ensure not just a more competitive U.S.economy and robust future jobs growth but also a cleaner planet.
– Rebecca Lefton is a Policy Analyst at American Progress.