5 Solar Predictions for 2011

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So this is it, the start of a new year is upon is. Solar gained majortraction in the U.S. and across the globe in 2010. But what’s in storefor the solar industry in 2011? It’s likely going to be another crazyride with wild growth. Here are some projections for 2011.

1. Solar will continue to grow in the U.S. by leaps and bounds in 2011and beyond. According to GTM Research Managing Director Shayle Kann, 1.5 gigawatts of solar could be installed in the U.S. in 2010. “The U.S. PV market will grow more than global demand in 2012 and beyond,” he said.That’s partly because incentives in other countries, like Spain andGermany are drying up and partly because of incentives and requirementsin the U.S., like renewable portfolio standards (RPSs).

One of the biggest factors that will impact the solar market in the U.S. was the passing an extension of the 1603 Treasury Grants in December2010. The extension allows for investors in commercial solar projects to recoup their tax rebates upon completion of their projects.

2. It won’t just be California making solar headlines. The majority ofstates—29, according to the Database of State Incentives for Renewablesand Efficiency—have enacted an RPS and 7 more have RPS goals in place.As utilities and power producers race to meet the requirements,large-scale photovoltaic projects are likely to start springing up allover the place.

California is likely to remain the overall leader in installed capacity, but other states are likely to become more significant players in thesolar market. “Significant gains will be seen in Oregon, Texas, Ohio,Florida, Colorado, Washington, New Mexico, Tennessee, New York,Pennsylvania, Massachusetts and North Carolina,” said EuPD’s report“U.S. Solar Policy Impact Analysis.”

3. Major firms will enter the solar market in 2011. The entrance ofthese and other companies show that the industry is reaching new levelsof maturity and the big boys want to get in before its too late.

For instance, General Electric is reentering the solar market in 2011,for instance. The company previously offered crystalline siliconphotovoltaics but stopped selling them. Starting in 2011 it will offerplayers will make significant headway into the market with new two types of thin-film photovoltaics. “GE’s CdTe panels are available in morelimited quantity through 2011, whereas GE’s CIGS panels will be morewidely available,” said a General Electric spokesperson. Similarly,Boeing will introduce more efficient photovoltaic panels in 2011 thatcould displace SunPower as the world’s most efficient commerciallyavailable solar modules. And Dow Chemicals will introduce its Powerhouse Solar Shingles for commercial availability in 2011.

4. Fossil fuel prices will increase, making solar more attractive.Across the board, from oil, to coal and natural gas, the cost of digging up deteriorated dinosaur remains is going to get more expensive.Already gas industry analysts are projecting that gas will again costmore than $3.00 a gallon across the U.S. In fact, former Shell Oil CEOJohn Hofmeister said that gas prices will reach $5 per gallon. Coalprices will also increase, predicted Dennis Markatos-Soriano, directorof the East Coast Greenway Alliance. He projected, “Supply increasestake time so the tight global market will likely push spot market coalprices above $150/ton, potentially challenging mid-2008 levels above$175/ton.” He also projected that natural gas prices will increase in2011. “I see natural gas rising from the bottom ~$4 per MMBtu [i.e. 1million British themal units] lately but staying mostly restrained below $7 (still significantly below the summer 2008 high ~$10).”

5. Solar prices will drop both in terms of module costs and installation costs, making solar even more attractive. Module costs for solar panels have been dropping almost every year. “From 1998-2009,capacity-weighted average installed costs declined by about 3.2 percent(or three cents per watt) per year, on average, starting from $10.80 per watt in 1998,” according to the Lawrence Berkeley National Laboratory’s recent report, Tracking the Sun III. However, things stagnated in 2009. The cost of solar modules dropped in 2009, but the cost of installedsolar lagged.

Preliminary results showed that the costs have dropped significantly in2010 and that trend is likely to continue into 2011. RPSs are anotherfactor that could help reduce the cost of solar significantly. And asmore companies enter the solar market and the overall industryproduction capacity increases, the cost of solar is likely to decrease.

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