US Solar Power Market Reaches $6 Billion In 2010, Installations Double-Study

Mar 13, 2011 - Dow Jones & Company, Inc. - energycentral.com

The U.S. solar power market grew by two-thirds in 2010 to $6 billion, while installations of solar-power projects doubled to about 1,000 megawatts, according to a study released Thursday.

The primary growth in the U.S. solar market has been on the demand side, although U.S. manufacturing of solar panels and related products also grew, the Solar Energy Industries Association and GTM Research said in the study.

Global solar-power demand growth outpaced growth in the U.S., as solar power installations more than doubled to 17,000 megawatts, led by robust demand in Germany and Italy, the study pointed out. Nevertheless, the study predicted that U.S. solar-power demand will double this year, thanks largely to government incentives.

California continued to lead U.S. states in solar-power installations, followed by New Jersey, Nevada, Arizona and Colorado.

The average weighted price of a solar-panel system fell by more than one-fifth in 2010 to $5.13 a watt, due largely to the growth of large-scale utility systems. The study noted that solar-system installation prices varied widely nationwide and among different market segments. Residential solar systems ranged from less than $5 a watt in some states to more than $8 a watt in others, while commercial and other non-residential installations ranged from $4 a watt to more than $7 a watt, the study said.

The study noted a growing trend in utility-scale solar farms, which accounted for 28% of the market, up from 16% in 2009. This year, utility-scale solar project installations are expected to jump three-fold to more than 700 megawatts, the study said.

The study's authors predicted that the potential for growth in U.S. utility demand for solar-panel generation "is virtually boundless," although the growth will depend on availability of government loan guarantees and the extent to which "financing bottlenecks," can be loosened.

The study tracked installed solar panels and other equipment, rather than shipments of solar panels, which tend to yield larger numbers.

While U.S. manufacturing of solar wafers, cells and panels increased last year and new factories are planned for Tennessee, California and Mississippi, the study noted that other solar manufacturing has continued to migrate to "low-cost regions" such as China and Taiwan. It cited plans to shut U.S. solar-product factories announced by BP PLC's (BP, BP.LN) solar unit, Evergreen Solar Inc. ( ESLR) and Spectrawatt. The study predicted that additional factory closures " will not come as a surprise" amid continued "cost pressure on domestic plants."

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@ dowjones.com