The Solar Energy Industries Association (SEIA) released a reportearlier today on solar market behavior in 2009. “US Solar Industry: Year in Review 2009? (PDF) reveals somesobering truths about the effect the recession had on the growth ofsolar energy in the United States–but also showed that the residentialsolar sector doubled in size.
Home solar installations comprised in large part the 37percent growth in total installations over 2008. Solar hotwater heating didn’t do quite so well, but still managed a respectable10 percent growth over 2008. However, solar pool heating–oftenconsidered a luxury item and not eligible for many of the sameincentives as other solar energy systems–fell by 10 percent.
And during the year of high unemployment rates and financial hardship for many Americans, the SEIA report says that the solar industry wasdoing its part by providing clean energy jobs: “In total, thesolar industry and its supply chain now support roughly 46,000 jobs inthe U.S. With growth expected to continue, that number islikely to surpass 60,000 by the end of 2010.”
Federal tax incentives and state regulations were credited withdriving growth across all sectors. American Reinvestment and RecoveryAct (ARRA) funds have found their way into many state budgets to support clean energy programs, so the two are heavily intertwined. California solar continued to lead the way with the most new installations (220 megawatts) and the highest overall solar capacity (1,102 mW),while New Jersey was a firm runner up (57 mW and 128mW, respectively).
Effects of the economic downturn were most clearly seen in totalgrid-tied solar electric growth, which at 38 percent “fell short of the84 percent growth in 2008.” Yet cost continued to falldramatically–although home solar installations are more labor-intensivethan large commercial systems and therefore more expensive, and industry growth relied heavily on the residential sector in 2009, installation costs still fell by about 10 percent overall. This is becausesolar module prices have been decreasing sharply due to technologyadvances and cheaper materials; because solar panels account for such ahefty percentage of total cost, any significant change in their marketvalue will be reflected in the end cost to the consumer.
The SEIA report predicts that 2010 will be a banner year forsolar growth in the U.S. The industry group is pushing hard for the federal government to extend its current alternative to the 30percent tax credit for commercial solar installations–with tax equity at a nearly all-time low, the traditional investment tax credit is oflittle or no use for most businesses. To address this, it’s currentlypossible to receive an equivalent amount as a grant. If this alternative expires as planned at the end of the year, it could put a damper onlarger-scale solar moving forward.
All things considered, the solar industry performed remarkably wellacross all sectors last year. Home solar certainly took the cake,indicating that solar’s unique ability to fill the small-scaledistributed generation energy market is becoming more widely recognizedand accepted. As more states begin to offer their own solar rebates andas the cost of solar technology continues to fall, we should have manymore years of solid growth. A robust solar market can and will play into the health of the American economy in the future. The positive trendseven in a year of severe recession demonstrate that this is one industry doing things right.