The quarterly SEIA/GTM Research U.S. Solar Market Insight™ report shows the major trends in the U.S. solar industry. Learn more about the U.S. Solar Market Insight Report.
The U.S. solar industry has much to celebrate about the year 2013. Photovoltaic (PV) installations continued to proliferate, increasing 41% over 2012 to reach 4,751 MW. Solar was the second-largest source of new electricity generating capacity in the U.S., exceeded only by natural gas. And the cost to install solar fell throughout the year, with average system prices ending the year 15% below the mark set at the end of 2012.
The U.S. solar market showed the first real glimpse of its path toward mainstream status in 2013. The combination of rapid customer adoption, grassroots support for solar, improved financing terms, and public market successes indicated clear gains for solar in the eyes of both the general population and the investment community. And in the long term, a mainstream solar industry will need customers who seek out and support solar, as well as investors who see an attractive risk-adjusted opportunity in the market.
The solar industry also became a major part of a much larger discussion that took center stage in 2013 around the future of electricity and electric utilities. As distributed solar gains steam, and as adjacent technologies such as energy storage become economically viable, the traditional utility business model is increasingly called into question. Throughout the electricity industry, 2013 was the year of catchphrases such as “utility 2.0” and “utility of the future.” Utilities themselves began to stake out positions on all sides of the issue, some seeking to protect their current territory and others investing in distributed generation – capitalizing on the opportunity that comes with change.
If 2013 was about raising the issue, 2014 will be about defining solutions. Increasingly, solar is not bound by its cost, but rather by its role in the electricity sector. And as solar continues along its path toward the mainstream, its integration with the broader electricity market from a technical, market and regulatory perspective will become one of the most important issues in the industry.
- The U.S. installed 4,751 MW of solar PV in 2013, up 41% over 2012 and nearly fifteen times the amount installed in 2008
- There is now a total of 12.1 GW of PV and 918 MW of CSP operating in the U.S.
- There were 140,000 individual solar installations in the U.S. in 2013, and a total of over 445,000 systems operating today
- Q4 2013 was by far the largest quarter ever for PV installations in the U.S., with 2,106 MW energized, up 60% over the second-largest quarter (Q4 2012)
- More solar has been installed in the U.S. in the last eighteen months than in the 30 years prior
- The market value of all PV installations completed in 2013 was $13.7 billion
- Solar accounted for 29% of all new electricity generation capacity in 2013, up from 10% in 2012. This made solar the second-largest source of new generating capacity behind natural gas.
- Weighted average PV system prices fell 15% in 2013, reaching a new low of $2.59/W in the fourth quarter
- We forecast 26% PV installation growth in 2014, with installations reaching nearly 6 GW. Growth will occur in all segments, but will be most rapid in the residential market.
- The U.S. also installed 410 MW of concentrating solar (CSP) in 2013, increasing total CSP capacity in the U.S. by more than 80%
- The wave of concentrating solar power installations slated for completion at the end of 2013 into 2014 kicked off with the 280 MWac Solana project and the Genesis Solar project’s initial 125 MWac phase. In early 2014, BrightSource’s notable Ivanpah project also began operating and SolarReserve’s Crescent Dunes began commissioning.
Additional highlights from 2013 in the U.S. solar market include:
- Positive Early Signs in NEM Debates: Disputes between utilities and solar advocates emerged over the issue of net energy metering (NEM) across a variety of markets, ranging from major solar states (e.g., California, Colorado and Arizona) to more nascent solar states (e.g., Utah, Idaho, Louisiana and Georgia). Broadly speaking, the solar market has remained unscathed thus far. But the next two years will bring both new venues for NEM debates and longer-term decisions in the existing battlegrounds.
- Financial Innovation: After years of discussion and speculation, a number of new financing mechanisms for solar emerged in 2013. NRG Energy took its first YieldCo public, generating a tradable, dividend-producing security that contains both utility-scale and rooftop solar projects, as well as fossil fuel assets. SolarCity successfully launched the first distributed solar securitization, worth $54 million. Opportunities for consumers to invest in solar via crowdfunding or community solar gained new prominence.
- Cost Reduction: PV module prices increased slightly in 2013, the first annual price increase since 2008. However, prices fell substantially for other components such as inverters (which decreased by 15% to 18%) and racking systems (19% to 24%). In addition, a range of other factors including downstream innovations drove down overall system prices throughout the year in all market segments. By the end of the year, system prices had fallen 9% in the residential market, 16% in the non-residential market and 14% in the utility market.
- A New U.S.-China Trade Case: On December 31, 2013, SolarWorld Industries filed a new antidumping/countervailing duty petition before the U.S. International Trade Commission. This petition seeks to prevent Chinese module manufacturers from using Taiwanese crystalline PV cells to avoid paying the import tariffs on modules with Chinese cells that were imposed after SolarWorld’s initial petition, filed in October 2011. Under the previous ruling, Chinese module manufacturers can produce solar wafers in China, ship them to Taiwan for cell manufacturing, and then send them back to China for module assembly to avoid U.S. import tariffs of more than 30%. While the outcome of this case remains in question, it is likely to reshape the U.S. solar market in some fashion. [See the Full Report for more details, or visit http://www.seia.org/policy/manufacturing-trade/international-trade.]
- California Sees Unparalleled Growth: California alone installed more than half of all solar in the U.S. in 2013. In fact, the state installed more solar in 2013 than the entire country did in 2011. California led the pack in each market segment and saw a doubling of installations in both the residential and utility segments. Looking to 2014, California shows no signs of slowing down, particularly in the distributed generation market.
- The Ascent of North Carolina, Massachusetts and Georgia: While Arizona and New Jersey, historically the second- and third-largest state solar markets, faltered in 2013, three states in particular emerged to fill the gap. North Carolina grew 171% over 2012 to install 335 MW, Massachusetts grew 76% to install 237 MW, and Georgia grew 762% to install 91 MW in 2013.
- The Realized Promise of Centralized Solar: The U.S. installed over 2.8 GW of utility solar in 2013, up 58% over 2012. Eleven individual projects of more than 50 MW each were completed in 2013, more than in any other year. Together, Arizona, California, and North Carolina accounted for 87% of all utility PV installations.
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