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U.S. solar surge: Installations up 85%

U.S. solar surge: Installations up 85%

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The U.S. added 85 percent more solar panels in the first quarter from the same period last year. Find out what's driving the growth and which states dominated the market.

The U.S. added a whopping 506 megawatts of solar panels in the first quarter of 2012 -- some 85 percent more than the same period last year and the second-highest quarter of installations ever, according to the U.S. Solar Market Insight report released today by GTM Research and the Solar Energy Industries Association.

At the close of last year, predictions for 2012 weren't quite so rosy. Forecasters worried at the time, that the potential expiration of 1603 Treasury cash grant program as well as the potential for import duties on Chinese cells and modules would have a momentum-crushing effort on the U.S. solar market. That hasn't happened yet and GTM Research and SEIA now foresee a positive 2012. However, the report warns that recent tariffs on Chinese cells and the official expiration of the 1603 Treasury Program will be felt most next year.

More than 18,000 photovoltaic systems came online in the first three months of the year, higher-than-expected numbers that prompted the SEIA and GTM Research to change their outlook for 2012. The research firm and industry group now expect solar PV installations to hit 3.3 gigawatts in 2012. If their forecast is right, the U.S. market share of global installations will reach nearly 11 percent in 2012, making it the fourth-largest PV market in the world.

The residential and non-residential markets in aggregate grew 35 percent quarter-over-quarter, a surprising jump considering uncertainty surrounding available project finance, import tariffs and state-level demand.

The growth was driven largely by the commercial sector and demand in New Jersey and California. Polysilicon and PV components costs, which continued to soften, as well as installation prices also fueled growth. Installed prices fell in every market segment in the first quarter from the same period last year.

Residential installed prices fell 7.3 percent, commercial fell 11.5 percent and utility installed prices dropped 24.7 percent from the first quarter of 2011, according to the report. Installed prices for all U.S. solar systems dropped 17 percent to $4.44 a watt, a figure heavily impacted by the volume of utility-scale installed PV in a given quarter.

Several recently completed utility-scale projects also helped push the installed capacity figures higher. Eighteen utility-scale projects pushed installations to 124 MW in the first quarter. The first phase of First Solar's 290 MW Agua Caliente solar farm was the largest project under construction in the first quarter. The majority of the Agua Caliente project is expected to be online by the end of the year.

Photo: Solona solar project in Gila Bend, Ariz., by Abengoa

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Kirsten Korosec

Contributing Editor

Kirsten Korosec has written for Technology Review, Marketing News, The Hill, BNET and Bloomberg News. She holds a degree from Northwestern University's Medill School of Journalism. She is based in Tucson, Arizona. Follow her on Twitter. Disclosure