Installation of solar photovoltaic (PV) panels doubled in 2011 and appears to be on track to grow by an additional 75% in 2012. But that could be end of the run for a while.
Solar panel makers like First Solar Inc. (NASDAQ: FSLR), SunPower Corp. (NASDAQ: SPWR), Trina Solar Ltd. (NYSE: TSL), Yingli Green Energy Holding Co. Ltd. (NYSE: YGE), Suntech Power Holdings Co. Ltd. (NYSE: STP), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), Canadian Solar Inc. (NASDAQ: CSIQ), and LDK Solar Co. Ltd. (NYSE: LDK) saw prices fall by -50% in 2011. The price collapse has stabilized somewhat as manufacturers work through inventories, but over-capacity remains and many of the Chinese solar PV makers will be looking to add installation capabilities this year.
Total solar PV installation in 2011 came to 1,855 megawatts. Another 12 megawatts of concentrating solar power (CSP) were installed. For 2012, solar PV installation is forecast to total 2,800 megawatts with an additional 81 megawatts of CSP also coming online.
According to new research from the Solar Energy Industries Association (SEIA) and GTM Research, solar installations in the US during the first quarter of 2012 totaled more than 500 megawatts, the best first quarter ever, as the US looks set to install nearly 3,000 megawatts of solar PV in 2012.
By state, the top ten for 2011 looks like this:
- California — 542 megawatts installed
- New Jersey — 313 megawatts installed
- Arizona — 273 megawatts installed
- New Mexico — 116 megawatts installed
- Colorado — 91 megawatts installed
- Pennsylvania — 88 megawatts installed
- New York — 60 megawatts installed
- North Carolina — 55 megawatts installed
- Texas — 47 megawatts installed
- Nevada — 44 megawatts installed
The recent anti-dumping ruling by the US Department of Commerce is likely to have a negative impact on solar installations in 2013, as is the end of the last remaining federal solar subsidy program. If the expected tariffs are added to imported Chinese solar panels, costs will rise about 40%. With no federal subsidies to pick up the slack, solar PV installations will fall sharply.
The worse corollary is that the US depends more on installing solar projects for job creation than on making solar panels. US solar PV manufacturing fell by -4% year-over-year in 2011. US manufacturing in 2011 was essentially flat compared with a doubling in 2010 manufacturing.
The chief reason for the gains in solar PV installations in 2011 was dramatically lower panel pricing. The nearly -50% drop in panel pricing lowered total installed system costs by about -7.5%, with the biggest drop coming in utility scale installations. Innovative financing plans also contributed to growth because many solar installations were financed by the installers rather than the home or business owner, making the up-front out-of-pocket cost of a solar installation essentially zero. The home or business owner signs a long-term power purchase agreement at competitive rates to pay off the cost of the system.
First Solar shares jumped by double digits yesterday on news that the company would keep its German plant open for a few more months before closing at the end of the year. Shares are coming back to earth today, down by -7.5% at $13.83 from a close of $14.95 last night. People finally figured out that an extra three months of production was not going to turn First Solar around.
An summary of the research is available here.