Cumulative US PV Market to Approach 20 GW by the End of 2014

Cumulative solar photovoltaic (PV) installations in the United States hit the 10 GW level in mid-2013 and are on course to double by early 2015, approaching the 20 GW figure by the end of 2014.

Continuing cost declines – and a push by project developers to move projects towards completion before a reduction in the federal investment tax credit (ITC) – are helping to drive growth in the US PV industry.

Along with this, new capital continues to flow into the sector, and novel business models are opening up markets where solar is competitive with retail electricity rates.

On the global level, stabilizing component prices (and the knowledge that policy support is decreasing over time) means that downstream players are eager to move projects forward rapidly, rather than wait for further cost declines or new support mechanisms.

According to new research featured in the NPD Solarbuzz North America PV Markets Quarterly report, by the end of 2014, cumulative PV installs in the US market will approach 20 GW. This would represent a doubling of cumulative solar PV capacity within two years, with a compound annual growth rate (CAGR) above 50% since 2006.

While large-scale ground-mounted systems continue to account for the largest share of the US market, all segments are seeing growth. This strong growth is being assisted by an influx of new capital for centralized and distributed generation (DG), with third-party ownership and system leasing providing a boost to the DG segment.

With solar PV systems being recognized as a source of (relatively) low-risk long-term revenues, this asset class is proving increasingly attractive for installers and utility companies, as well as institutional investors and private owners/municipalities.

However, there are several risks that could affect solar PV growth in the US.

These include challenges at the state level to renewable portfolio standard (RPS) targets and net-metering programs, and the uncertainty related to the ongoing investigation into Chinese and Taiwanese PV components at the federal level.

If state-level policies were dramatically scaled-back, or the supply of PV modules was severely restricted, this could prompt a decline in demand or an increase in pricing. While policy changes would typically take some time to filter through to the demand profile at the state level, any change on the trade cases could have a much quicker – and countrywide – impact. Analysis of the US market growth will be covered in detail at the forthcoming NPD Solarbuzz Seminar at PV America, June 23 2014 in Boston, and NPD Solarbuzz North America PV, August 6 2014 in San Jose, conferences.

Figure 1: Cumulative installed capacity in the US PV market, 2006-2014. Source: NPD Solarbuzz North America PV Markets Quarterly, April 2014.