California is still a very important solar market; however, it's
losing ground to a diverse range of up-and-coming states.
Philadelphia --
The U.S. solar PV market is becoming increasingly fragmented. And
while that's somewhat frustrating for solar businesses working
across states with different incentives and regulations, it's a very
good thing for the overall health of the national market.
In 2005, California represented 80% of the U.S. solar
market; today, it's only 30%.
According to a recent report from GTM Research and the
Solar Energy Industries Association, East Coast markets –
lead by New Jersey, Pennsylvania, Florida and North Carolina
– installed more solar than California in 2010.
With Nevada, Arizona, Colorado, New Mexico and Texas
putting up solid numbers in the top ten states, the Western
markets are still proving dominant. But the emergence of a
diverse range of Eastern markets in the top list is evidence
that the U.S. solar market is becoming increasingly diverse.
In 2007, there were only four states that developed over
10 MW of PV; in 2010, 16 states reached that threshold.
Below, Rhone Resch, president of the Solar Energy Industries
Association, talks about why that's so significant. He also
describes why the scattered nature of the American solar
market will actually create more sustainable growth in the
long-term.
I also interviewed Shayle Kann, the managing director for
solar at GTM Research, about how the diverse American market
fits into the similarly-diverse international picture. With
between 1.5 GW and 2 GW of solar PV potentially coming
online in the U.S. in 2011, it will still only represent a
small portion of the 20 GW expected globally. But that share
will continue to grow as Germany, Italy, the UK and Ontario
continue reducing their Feed-in Tariffs.
One other surprising trend in 2010 was the growth in U.S.
manufacturing capacity. Despite gloomy reports about the
country losing the global race to establish a strong solar
manufacturing base, the U.S. increased wafer production by
97% (to 1,018 MW), cell production by 81% (to 1,657 MW) and
module assembly by 62% (to 1,684 MW).
China still dominates the manufacturing sector,
representing more than 70% of added production capacity in
2010, according to iSuppli. Some onlookers believe that with
the right policies, America could catch up. But Alan King,
VP and general manager of Canadian Solar, doesn't see that
happening. He says the lack of a coherent federal policy –
along with the patchwork of state and local markets – make
investing in U.S.-based production facilities a guessing
game.
The take away from all of this? The U.S. is clearly a
growth market well into the future, with states continuing
to lead the way. While the scattered framework creates a
more sustainable macro-environment for solar, it still has
its limitations.
If the federal government continues to put off
establishing a federal clean energy target, creating a price
mechanism for carbon and forming coherent permitting and
interconnection standards, those factors could be the
difference between a good solar market and a great solar
market.