Growth in solar installations dramatic

Tuesday July 23, 2013

The growth in solar-electric (phototoltaic or PV) installations in the United States over the past decade has been nothing short of spectacular. Double-digit growth has continued for more than a decade, averaging 65 percent annual growth in capacity per year, according to U.S. Solar Trends 2012, published recently by the Interstate Renewable Energy Council.

New PV capacity in 2012 was an astounding 80 percent greater than in 2011. Utility installations in 2012 -- mostly in places like southern California, Arizona, and Nevada -- increased 150 percent over 2011, while distributed installations increased 36 percent. Those distributed installations include residential, commercial, and institutional. In terms of number of installations, 95,000 went in during 2011, and there are now something like 700,000 PV systems in place nationwide.

Growth despite setbacks

All this growth has happened despite some high-profile setbacks to the industry, such as the widely publicized (and over-hyped) bankruptcy of Solyndra in 2011. With the cost of PV modules dropping, there continues to be a lot of consolidation in the industry, and a fair number of manufacturers are being forced out. Some of the more innovative technologies that have emerged either to boost performance or to reduce cost have lost out to the more conventional polycrystalline solar cell technology, as manufacturing efficiencies with that technology have improved.

Interestingly, the Chinese companies that are often blamed for pushing out others have suffered as much as any -- because they grew faster than the markets, creating a glut. Some large Chinese companies have gone under and others are apparently teetering on the brink of failure.

Incentives driving growth

Clearly, incentives have helped a great deal in the dramatic growth we have seen. These incentives include federal tax credits, state grants, and renewable portfolio standard (RPS) laws that require utility companies to include renewables in their power generation mix.

The impact of these various incentives becomes clear when one looks at where the most dramatic growth has occurred. All of the top-ten states for utility installations in 2012 were in states with RPSs in place, including California, Arizona, Nevada, and North Carolina, which accounted for more than 75 percent of utility installations.


Innovative financing and ownership models are increasingly coming into play with the PV industry. Most residential installations going in today are now leased or financed through third-party lenders -- in some cases homeowners don’t have to put any money down and they see an immediate drop in their utility costs. Increasingly, PV systems aren’t actually owned by the homeowners on whose roofs they are installed.

These financing programs are becoming more important than rebates in driving installations. This is important, as it may provide a way for the short-term incentives like tax credits to gradually disappear without bringing the solar industry to its knees -- as occurred with the solar water heating industry in the 1980s, when the earlier solar tax credits ended.

What’s ahead?

Most experts seem to agree that the rapid growth in PV installations will continue at least through 2016, when the 30 percent federal solar tax credit is scheduled to end. Already, many state incentive programs have been reduced or terminated, but these have often been offset by dropping prices of PV equipment.

My hope is that incentive programs can be gradually scaled back while costs continue to drop, so as not to cause dramatic changes in the economic return on these systems. This month the U.S. passed an important milestone: becoming the fourth country with 10 gigawatts (10,000 MW) of PV capacity installed -- joining Germany, Italy, and China.

And last year in the U.S. renewable energy sources (including wind, small hydro, biomass, and solar-thermal power generation, as well as PV) accounted for 49 percent of all electric generation capacity that came online. That is a huge accomplishment.

If we can keep the momentum going and address energy storage and grid management so that larger amount of renewably generated electricity can be effectively used, our nation will be making significant headway in tackling our challenging climate change conundrum.

Alex Wilson is the founder of BuildingGreen, Inc. and the Resilient Design Institute (, both based in Brattleboro. Send comments or suggestions for future columns to


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