US Solar Market Bright Spots
Posted July 24th, 2013
A surge in in solar panel installations is expected this year, due mainly to an increasing number of residential installations. The pace of these installations grew 53% from the first quarter of 2012 to the first quarter of 2013.
The growing popularity of solar leases, falling prices for solar panels (due to a dramatic drop in silicon prices) and efforts to reduce the costs of marketing, quoting, selling and permitting these installations, have steadily boosted the growth of the solar market in the last few years.
Incentives Going Away
While federal, state and other local incentives still play a role in the overall expansion of the solar market, their importance will (obviously) diminish as these programs come to an end. Solar companies are adjusting working to find ways to continue growing their businesses.
For example, in California, as the state solar initiative rebate program winds down, installations are still occurring – at a rapid pace. Solar companies in that state report that they are increasingly able to install solar energy systems – that can produce electricity at rates comparable to the retail prices charged by major utilities – even if they use only the federal tax credit and not the state’s incentive.
Boom for Integrated Solar Panels
Solar panels that are integrated right into the rooftops and walls of buildings (known as “building-integrated photovoltaics” or BIPV) could provide an additional bright spot for the solar market. As new home construction and sales rebound, the BIPV market could quadruple over the next five years from $606 million in 2012 to $2.4 billion in 2017.
Commercial Market
However, declining state incentives is hampering the growth of the commercial market segment, which serves businesses, government agencies and other non-residential, non-utility customers. Despite headlines regarding Apple or Google’s newest solar panel farms, this segment is set to only grow 18%, down from 29% in 2012.
Commercial installations tend to be larger, and businesses want as short a pay-back period as possible. There are expectations of huge energy savings by going solar, especially in California where utility rates are typically higher than in other states. Those savings are harder to achieve with lower subsidies and incentives. Commercial installations fell from the fourth quarter of 2012 to the first quarter of this year in key markets such as California, Arizona, Hawaii and Massachusetts. Only New Jersey resisted the trend; in 2012 the state was responsible for nearly 1/3 of the nation’s non-residential solar installations. However, after a strong start in 2012, the state’s commercial installations began to fall off as well.
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