Sunny outlook for solar power

By Jack Keough

A new report from the Solar Energy Industries Association (SEIA) shows strong growth in solar installations and that is good news for electrical distributors and manufacturers looking to serve this important market.

The study shows that photovoltaic installations in the United States are on pace this year to surpass combined installation totals from 2000-2010 (2500 megawatts), which is more power than two nuclear plants.

The report compiled by GTM Research and the SEIA, is titled U.S. Solar Power Market Insight: 2nd Quarter 2012. The study reveals that U.S. solar power achieved its second-best quarter in history, having installed 742MG and the best quarter on record for the utility market segment.

Utility installations hit 477MG in the second quarter, with eight states posting utility installations of 10MG or greater: California, Arizona, Nevada, Texas, Illinois, North Carolina, New Mexico, and New Jersey. In total, the U.S. now has 5,700MG of installed solar capacity, enough to power more than 940,000 households.

Industrial conglomerates are also investing in the solar business. Just last week, Sumitomo Corp. of America and its parent, Sumitomo Corp. invested  in Desert Sunlight Solar Farm, a 350MG solar power project under construction in California, just east of Palm Springs. This is Sumitomo’s first investment in U.S. solar projects and will expand Sumitomo’s renewable energy portfolio which includes over 1,800MG projects across the U.S.

 Sumitomo’s investment was made through a purchase of part of GE Energy Financial Services’ share in the Desert Sunlight project, giving the company 25% ownership.  

According to the U.S. Department of the Interior, Desert Sunlight is the largest PV facility approved for U.S. public land. It will generate enough power for more than 165,000 homes. The facility is located on 4100 acres and during construction will generate more than 630 construction jobs.

“The U.S. solar industry is rapidly growing and creating jobs across America despite the slow economic recovery,” said Rhone Resch, president and CEO SEIA. “More solar was installed in the U.S. this quarter than in all of 2009, led for the first time by record-setting utility-scale projects. With costs continuing to come down, solar is affordable today for more homes, businesses, utilities, and the military. Smart, consistent, long-term policy is driving the innovation and investment that’s making solar a larger share of our overall energy mix.”

The U.S. solar industry now has more than 100,000 workers in all 50 states.

The SEIA said that second quarter was a tale of many markets for solar in the U.S.  Growth rates varied greatly across states and across market segments. New Jersey began to experience a long-expected correction, while Massachusetts boomed. Overall commercial installations fell nationally, but utility installations more than doubled on a quarterly basis.

According to the report, photovoltaic (PV) projects will remain strong through the last two quarters of 2012. With 3400 megawatts of utility PV projects currently under construction, and weighted U.S. average system prices 10% lower than the previous quarter, GTM Research forecasts an additional 1.1  gigawatts(GW)  of utility PV to begin operating before year’s end. The report forecasts a total of 3200MG, or 3.2GW, of PV will be installed in the U.S. in 2012, up 71% over 2011.

A strong second half of the year is still expected, driven by a slight recovery in the California commercial market as well as large utility installation figures in Q4. By year’s end, it is anticipated that the utility market will account for 54% of annual installations, up from 40% in 2011. Still, the overall growth rate will have slowed to 71%, and expect a further slowdown in market expansion in 2013 to 21%. This will usher in a new period, from 2012-2016, with relatively lower but still impressive annual growth in the 25% to 30% range.

If the report is correct, it could be beneficial for electrical distributors who sell many products such as batteries, wiring and other miscellaneous items used by electrical contractors who install the PV systems. Other distributors are offering engineering services while some manufacturers have developed products, such as a range of PV fuses specifically designed to protect PV solar cell strings .A small number of electrical distributors are even stocking and selling solar panels.

For the fourth consecutive quarter, the U.S. residential solar market grew incrementally, installing 98.2MG. California, Arizona, and New Jersey led residential installations nationally, with smaller-market states of Hawaii, Massachusetts, and Maryland demonstrating strong quarter-over-quarter growth.

Other states are jumping into the expansion of solar power. Just a few weeks ago, Georgia Power filed a petition for approval to purchase 210MW of solar PV projects over the next three years. The projects will be a mix of large, medium and small-scale projects, allowing the utility to purchase solar energy from developments as diverse as solar farms, commercial buildings and homes.

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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