North American solar PV market forecast
November 29, 2011 -- The North American
solar photovoltaic
(PV) market is affected by strong utility-scale project demand,
declining solar incentives in distributed generation applications,
module over-supply, and significant policy uncertainty, finds NPD
Solarbuzz in its North America PV Markets Quarterly report.
With grid parity on the horizon in some North American regions, PV is
"positioned to take significant market share from other energy sources,"
said Craig Stevens, president of NPD Solarbuzz. "Downstream companies
are facing enormous challenges to adapt to rapidly changing channel
structure and business models in order to successfully participate in
that opportunity," he added.
In Q4 2011, the North America photovoltaic market is forecast to grow
33% Q/Q and 101% Y/Y. Q4 2011 installations of more than 0.8GW of PV
capacity are expected, resulting in a total demand of over 2.2GW in
2011.
The next four quarters carry significantly more downstream uncertainty
than normal. The
SolarWorld Chinese anti-dumping petition has split the US PV
industry, with clear evidence that some Chinese manufacturers and
project developers have already started to delay shipments and
installations. Taken together with the expiration of the US federal cash
grant, deferral of module supplies awaiting a price bottom will slow
2012 growth. The North American market, however, is still forecast to
triple in size by 2015, with the ground-mount installations securing the
largest market share of 42%.
In Q3 2011, the US PV market grew by 32% from Q2 2011. It could reach
1.9 GW for the year, which would mean that the market has doubled in
size for the second consecutive year. The United States will account for
84% of North American demand in Q4 2011; Canada, dominated by Ontario,
has the remaining 16%. When viewed at a state or provincial level,
California remains the largest single market in Q4 2011, with 21% of
market share. Ontario is forecast to become the second-largest region
(16%), followed by New Jersey (11%). Demand in the United States market
has spread to many states beyond California, but in Canada, Ontario is
99% of the national market, which creates significant policy risk.
The Canadian market is continuing its growth in Q4 2011, and is
projected to increase 35% Q/Q and 33% Y/Y, as utility-scale projects
continue development, most under Ontario’s previous incentive scheme.
The province’s current incentive program, a feed-in tariff, stimulated
approximately 16 MW of residential installations during Q4’11 and will
continue to be Canada’s primary driver of PV uptake. In terms of policy
developments, most attention is now focused on the FIT program’s review,
which is being conducted by the Ontario Power Authority. Expectations
are that FIT rates will decline, but other aspects of the policy, such
as local content requirements, will remain largely unchanged.
The primary driver in Ontario has been the feed-in tariff (FIT), while
American states have been driven by a combination of policies and
regulations at both state and federal levels. More recently, the US
federal government played a critical role in the US solar marketplace,
providing investment tax credits (ITC), cash grants, depreciation
bonuses and loan guarantees as vehicles to make PV more financeable. By
the end of Q3 2011, the federal government cumulatively awarded over
$1.4 billion in cash grants for solar systems, which is equivalent to
800MW of installed capacity. The California Solar Initiative, the
largest state-level incentive program in the US, has supported over 650
MW since its inception in 2007.
In Q4 2011, ground-mount installations are forecast to have 38% of the
market, followed by building-mount, non-residential systems (>100 kW),
which will have 37% of the market. The ground-mount segment benefited
from demand from Ontario and from large-scale installations in
California and Arizona geared toward meeting the state RPS requirements.
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Figure. North America market segmentation Q3 2011 (611MW,
left) vs. Q4 2011 (811MW, right). Source: NPD Solarbuzz North
America PV Markets Quarterly report. |
For large-scale non-residential and utility-scale projects in Q3 2011
and Q4 2011, the scheduled expiration of the US federal cash grant has
encouraged progress to meet qualifying requirements; ongoing
installation will continue throughout 2012, stimulated by the progress
requirements for these cash grants.
The NPD Solarbuzz North America PV Markets Quarterly report explores the
opportunities and risks facing downstream companies in the North
American region. NPD Solarbuzz is a globally recognized market research
business focused on solar energy and photovoltaic industries. For more
information, visit
www.solarbuzz.com.
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