GlobalData's report "The US Solar PV Market Analysis Policies and Incentives, Industry Trends and Forecasts to 2015" gives an in-depth analysis of the US Solar PV market and provides forecasts up to 2015. The research analyzes the key trends, major issues and growth opportunities in the US Solar PV market.
The US Solar PV Market Analysis Policies and Incentives, Industry Trends and Forecasts to 2015
Sushmita Chaudhuri | GlobalData
Market share by installed capacity, elaborate profiling of major market participants, information on major Solar PV parks and analysis of important news and deals provide insight into the competitive scenario in the US Solar PV market. This coupled with detailed information on the regulatory framework and key policies governing the market provide a comprehensive understanding of the market for Solar PV in the US.
Global Solar PV market is growing rapidly
The global solar PV market witnessed tremendous growth in 2008 and 2009 with 11,908 MW (megawatts) of installed capacity coming online in these two years as compared to only 2,392 MW installed in 2007. The cumulative installed solar PV capacity has more than doubled since 2007. Installed capacity increased from 9,162 MW in 2007 to 21,070 MW in 2009. Europe is the leading solar PV market with a share of 66% followed by the Asia-Pacific with the share of 17% in 2009. The market is driven by supportive mechanisms offered by governments across the world. The market stimulation packages being offered by several governments are expected to drive the growth of this industry in the coming decade.
The US solar PV market is driven my government support policies
The growth momentum of the US solar PV market has been largely facilitated by the support mechanisms provided by the federal and state governments. The US federal government has provided funding of $3.1 billion to the states, as part of its economic stimulus package, to encourage PV installations and expand solar PV support programs. This is part of the country’s plan to encourage the growth of renewables in the energy portfolio. The US government has extended the production tax credit (PTC) and investment tax credit (ITC) parts of the stimulus plan for PV development. The government has also extended federal tax credits for solar PV. California, the leading solar PV market in the US, was the first to initiate the feed-in tariff (FIT) system in the country. These support mechanisms combined with other policies and incentives are expected to open up high-growth markets for PV. In this backdrop the US market for solar PV is expected to rise to 10,885 MW by 2015 at a CAGR of 39% during 2009-2015.
Share of on-grid installed capacity increased
Ongrid power accounted for a share of 31% in cumulative solar PV installations in the US in 2001. This share increased to 75.5% by the year 2009. The key to the increase in the share of on-grid capacity is mainly due to the financial incentives provided by federal and state governments in supporting grid-tied systems.
California is the largest solar PV market in the US
The US grid-connected PV installations are mainly concentrated in a few states, with the state of California (757 MW) alone accounting for close to 66% of the country’s total cumulative installed solar PV capacity. The other major states with high cumulative installed capacity are New Jersey (101 MW), Colorado (52 MW), Nevada (49 MW), Arizona (36 MW), New York (32 MW) and Hawaii (20 MW).
Systems revenue increasing even with declining prices
The PV system price in the US in 2009 was $4.6/watt. It declined from $6.5/watt in 2001 by 29.6% to reach $4.6/watt by 2009. The oversupply of solar PV equipment in the global market, created by the economic meltdown and the collapse of the Spanish market, is now resulting in a correction in PV system prices in the US. It is expected that the system price will further fall to $3.25/watt by 2015. Even with these declining prices, systems revenue in the US are expected to increase on the back of rising PV installations. The US is the fourth largest solar PV equipments market in the world after Germany, Spain and Japan. Financial and policy support from the government are expected to drive revenues in this market from an estimated $189 million in 2001 to $1,726million by 2009 at a CAGR of 32%. The solar PV systems market in the US is expected to grow to an estimated $10,904 million by 2015 at a CAGR of 36%.
US Solar PV cell production increasing steadily
US Solar PV cell production has seen a steady increase in volume over the last five years. Even with a steady increase in the volume of cell production, the country’s share of the total global cell production continued to fall. The main reason for this fall in market share can be largely credited to countries like China, which is the largest producer of PV cells, Germany and Japan. The US PV cell production has reached over 650 MW by 2009, growing at a CAGR of over 26% for the period 2001-2009. The US holds about 7% of the global solar cell market. The top five solar cell-producing countries are China, Germany, Japan, Taiwan, and the US.
The US solar PV market has witnessed a decline in deal value and volume during 2009
This can be attributed to the economic downturn that led to credit crunch. Overall the financing activity in the sector has increased as compared to its level in 2001. Deal value has grown from $2,713 million in 2001 to $15,055 million in 2009, at a CAGR of 23.9%. Deal volume increased from 19 in 2001 to approximately 159 in 2009, registering an increase of 736.8% over 2001. This shows the increased investor confidence and interest in the new and clean technology. Majority of financing activity in the industry during 2009 came in the form of debt offering which constitutes 74% of the total deal value in the year. This is followed by equity offerings which constitutes 16% of the total deal value in 2009.
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