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Blog: Residential Market Powering Solar Industry

By Jack Keough

The solar industry says that the first quarter of 2013 was one of its best ever for photovoltaic (PV) system installations, according to a report by GTM Research and the Solar Energy Industries Association.  The report titled, U.S. Solar Insight : 1st Quarter of 2013  shows installations of 723 megawatts (MW) in the  quarter.

The report comes after several months of plummeting solar panel prices and a glut in the market, partially caused by China selling solar panels and components below cost in the U.S. and Europe. The European Commission has launched an anti-dumping investigation into imports of solar panels and their key components such as solar cells originating entirely from China. Last year the United States imposed tariffs on Chinese solar panels following similar complaints.

The cost of solar panels has dropped by more than 60 percent in the past two years and several companies such as Solyndra and Evergreen have filed for bankruptcy, The shakeout of some of these smaller companies was not unexpected while, at the same time, major players continues to grow.

However, some larger companies have slowed down their investments in solar.  GE, for example, was planning to build a 400MW solar panel factory in Colorado before canceling those plans last year.

But the SEIA says that the residential market is a highlight for U.S. solar with 53 percent year-over –year growth. Unlike the non-residential and utility markets, residential solar has not shown seasonality and market volatility on a national basis. Quarterly growth in the U.S. solar residential market has ranged from 4 percent to 21 percent in 12 of the past 13 quarters, SEIA says.

The non-residential market shrank 20 percent on both a quarterly and annual basis, which reflects slow demand across a number of major markets. The utilities market more than doubled year-over-year, with 24 utility PV projects completed in Q1 2013, according to the association.

The California residential market had a record quarter installing more new PV capacity, and for the first time was greater than the non-residential market. This is largely driven by increased “retail rate” parity in major utility territories, where a residential PV system can provide a discount at retail electricity rates with few or no incentives other than the 30 percent federal investment tax credit (ITC)

“We are on the cusp of a new solar revolution in the U.S., driven by the rapid expansion of distributed generation,” said Shayle Kann, vice president of research at GTM. “Installations will speed up over the next four years as projects become economically preferable to retail power in more locations. However, changes to net metering and electricity rate structures could serve as the market’s primary barrier to adoption.”

Looking at the market on the whole, the forecast calls for 4.4 gigawatts (GW) of PV to be installed by the end of 2013, growing to nearly 9.2 GW annually in 2016. GTM Research and SEIA have increased each year’s forecast marginally from past editions of the report, due largely to increasingly bullish expectations for the residential market and the near-term opportunity it offers.

Meanwhile, Siemens said this week it is shutting down the last of its solar energy businesses after it failed to find a buyer, according to Reuters.com. The company had put the business up for sale last October.

Siemens said the group would close Solel by early next year. The Israeli business has accumulated losses of around 1 billion euros ($1.33 billion) since Siemens bought it in 2009, including a write-off of the entire purchase price, according to the news website.

Siemens has spent seven months trying to sell Solel, which makes components used in solar-thermal power stations. Solar-thermal power is primarily used to power large solar plants. Some 280 employees will be affected by the closure, most of them in Israel.

The cost will run into the mid-double digit millions of euros, according to Siemens.
Industrial giant Siemens has already closed down its photovoltaic inverter business and pulled out of a major solar energy project.

Reuters also reported that Bosch ROBG.UL is looking to sell or close its photovoltaic solar operations after losing 2.4 billion euros since 2008. It partly blames a drop in U.S. energy prices caused by a growing abundance of shale gas.

Jack Keough was the editor of Industrial Distribution magazine for more than 26 years. He often speaks at many industry events and seminars. He can be reached at john.keough@comcast.net or keoughbiz@gmail.com

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