As a whole, the US solar industry will set a new record for annual installations in 2012. The US installed 684 megawatts (MW’s) of electricity in Q3 2012, which is the smallest quarter of this year but it still remains 44% above Q3 in 2011. While the annual installation figure for 2011 was approximately 1,700 MW’s, the current figure for 2012 after only three quarters has already exceeded that mark, almost surpassing 2,000 MW.
In addition, SEIA predicts that 1,200 MW of new energy will be installed in the remaining three months of this year, destroying the previous quarterly record of 792 MW in Q4 2011. A large 4Q will come as no surprise to the industry, as 41% and 42% of annual installations were made in the last quarter for 2010 and 2011, respectively.
The biggest reasons for the sudden surge in solar energy come from a combination of lower panel prices, federal solar power grants, subsidies, and tax rebates. Lower installation prices stem from an abundance of solar panels, mostly being manufactured in China. The SEIA report states that while global demand for panels has increased to 31 gigawatts (GW) this year, manufacturing capacity more than doubles that figure to 70 GW. This trend has been very prevalent in the last two years, as panel prices have dropped as much as 30% for all purchasers, including utilities, residences, and industrial facilities.
The federal government has granted a 30% tax credit on all projects that result in lower energy bills within a reasonable amount of time, including solar equipment and installation. Unlike older tax exemptions that had a cap of $2,000, the energy policy that was introduced in January 2012 offers no cap to the benefits. Residential installations have grown between 3%-21% on a national level, which the SEIA believes “makes the residential sector by far the most stable segment in the US market.” In addition, many states offer various funds through their government as well.
The solar industry has endured growing pains in the last few years, damaging their reputation in the eyes of naysayers. US-based panel manufacturer Solyndra filed bankruptcy in September 2011 despite a $528 million federal loan (and $25 million tax break from California) seven years earlier. In hindsight, many have scorned the company for not foreseeing the economic shift of the industry from a high-cost, low-volume model to the inverse.
President and CEO of SEIA Rhone Resch agrees, “[Q4 2012’s] record growth shows the power of innovation in the US solar industry…with costs continuing to come down and new financial options, solar energy is affordable today for more families, businesses, utilities, and the military. Thanks to smart long-term policy, the solar industry is growing to meet the challenge of putting Americans back to work and helping to grow both our nation’s economy and our clean energy portfolio.”
With substantial projected growth on the horizon, there’s no reason why the solar industry can not only survive, but flourish for years to come.
Energy Curtailment Specialists, Inc.