New Jersey: The Largest American Solar Market
For the second time the Garden State has trumped the Golden State in terms of new solar photovoltaics installed, that’s according to the recently released “U.S. Solar Market Insight: Q1 2012” by GTM Research and the Solar Energy Industries Association. The report found that overall the amount of PV installed in the first quarter of 2012 reached 506 megawatts.
“It is an 85 percent year-over-year growth rate compared to last Q1 in 2011,” said SEIA Vice President of Strategy & External Affairs Tom Kimbus, during a press conference. “This is during a time of consolidation in the industry. At a time when the economy is still trying to get on its feet. So to see this 85 percent growth rate was encouraging for all of us in the industry.”
More good news is on the way for the rest of the year. “We don’t see the growth of installations slowing down the remainder of this year either. In fact we see it picking up,” Kimbus said. “This report revises our previous estimates for 2012 in an upward direction. We now estimate that PV installations in the U.S. will exceed 3,200 megawatts this year.”
While the numbers were positive on a year-over-year basis, they were down on a quarter-over-quarter basis, which report author Shayle Kann, vice president at GTM Research, said is normal, since most installations in the U.S. have traditionally happened in the fourth quarter to take advantage of tax incentives that sometimes expire at year’s end. However, for the first time, two market segments, residential and commercial, were higher on a quarter-over-quarter basis.
“The residential market was up 12 percent from q4 2011 to install 94 megawatts and the commercial market was up 14 percent quarter over quarter to install 289 megawatts. And this is rare, you almost never see the residential and commercial markets higher in first quarter than they were in the fourth quarter,” Kann said.
While New Jersey topped the list in terms of most PV installed in the quarter, with 174 MWs of new PV, it’s not likely to remain there long. The state’s solar renewable energy credit (SREC) market is oversubscribed, making the value of a credit worth about $100 today, compared with $600 a year ago. That and gigantic utility-scale projects in California are starting to come online. Both of which will bring the lead running back to the Golden State. Other states that added significant amounts of soar in the first quarter included Massachusetts, Tennessee and and North Carolina, according to Kann.
As more states enact programs that support solar like net-metering, interconnection, and third-party ownership policies the national market will become more diversified in terms of states with significant amounts of solar power.
“Three markets where we’re expecting to see growth in the near term are Massachusetts, Hawaii and New York,” Kann said. Recent legislation both in New York and Massachusetts are spurring more PV in both states. “The Hawaii market is extremely strong where prices for electricity are high, PV is really already at parity [there]. The only really bottlenecks come in places like interconnection.”
While they anticipated more solar growth in 2012, the future of solar is a little less certain after the grandfathered 1603 grant applicants dry up. Similarly the fate of PV manufacturing in the U.S. is unclear. While some companies are adding manufacturing here, others are reducing manufacturing because of the steep drop in module prices because of oversupply and cheap, disputed imports from China. Still, “Overall the solar market is booming and we are having new manufacturers enter the U.S. market,” Kann said.
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