December 1, 2011 -- After the rapid expansion of the US PV
market in the last few years, the US solar industry is likely
heading for a period of slower growth. ClearSky Advisors' recent
analysis of the PV market in each of the 50 US states shows that
-- contrary to many hopes -- the US market will not be able to
provide immediate respite to all those photovoltaics
manufacturers that are suffering from the current over-capacity
and margin squeeze.
ClearSky Advisors' most recent US PV Market Forecast shows that
installed capacity will grow 7% to 1,628MW in 2012. Given
falling equipment prices, the slow growth means that overall
market value for 2012 will be flat or drop when compared to
2011.
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Developers in the US market will continue to reap benefits as
overcapacity in the solar supply chain will see the cut-throat
competition continue, with average selling prices for modules
continuing to fall for at least the first part of 2012.
Figure. US PV installed volume forecast, 2011-2015.
SOURCE: ClearSky Advisors December 2011. |
While the slower growth ahead might be a disappointment to
less-competitive equipment suppliers, it is not all doom and
gloom; pockets of opportunities can be found for those with a
smart and flexible market approach. For the most part, these
growth opportunities are starting to emerge in states with
strong solar policy support.
One such example is Maryland, a small state with a solar
carve-out that will drive cumulative growth of close to 80%
between now and 2015. Players looking to capitalize on these
opportunities must begin to look at their sales and marketing
approach outside California and New Jersey. As the nature of the
market changes, only those with the ability to calibrate their
channel strategy to match the market opportunity have a chance
of succeeding.
In terms of the overall market opportunity, the western US will
remain the largest regional market for the foreseeable future.
California and New Jersey will be the most important states for
some time to come, even if both states will face intermittent
market disruption.
Longer-term, from about 2014 on, ClearSky Advisors expects to
see the beginning of a period with stronger and sustained growth
take place, partly because the lower cost of solar equipment
will make solar a cost-competitive source of energy in certain
parts of the US (assuming the federal ITC continues). Even in
those cases, a targeted approach is required to maximize the
opportunity.
Increasingly, the US PV market will be dominated by
utility-scale PV projects, because that is the way utilities and
IPPs most often choose to meet the RPS targets.
ClearSky Advisors U.S. PV Market Forecast is based on the
development on a number of market scenarios. The numbers
referred in this article stem from our “Expected Case” scenario,
which -- among other factors -- assumes that the cash grant will
be discontinued from the end of 2011.
Jon Worren is the co-founder of ClearSky Advisors. Learn more
about him here:
http://www.renewableenergyworld.com/rea/u/jonworren
This article was originally published in the Renewable
Energy World network by www.RenewableEnergyWorld.com, and is
reprinted here with permission.