U.S. Solar Market Trends of 2010

While 2008's Great Recession put a damper on the solar market in 2009, steady growth since then meant a boost for the solar market in 2010. This boom, expected to carry into this year, was facilitated by increased capital through recovery after the economic meltdown, in conjunction with financial stimulus and higher consumer demand.

The U.S. Treasury Grant, for example, was enacted by Congress in early 2009 as part of the stimulus package. The program gives the option of a cash grant for installations-this in lieu of Investment Tax Credit, which was a weaker incentive for consumers. The Treasury cash program, which was originally meant to expire at the end of 2010, was later renewed for 2011. It provided $410 million, funding about 40% of non-residential PV installations in 2010, the tax credit levels of which are set to continue until 2016 (cash grants are up for renewal on a yearly basis). Many federal and state government solar installations were also funded by ARRA, while capital markets recovery for 2010 contributed to the growth of non-residential solar installations by 63%. Prices for PV modules decreased as well, by between 14 and 20 percent, providing a stimulus for areas without local policies already; however, financial incentives will continue to determine where the most solar installations are happening.

The number of installations in the residential sector in particular has grown a lot in the past decade. It increased by 64% and accounted for 91% of the grid-connected PV installations in 2010, but only 29% of the capacity; non-residential systems are, on average, ten times as big as residential ones. The overall PV capacity installed in 2010 doubled compared with 2009 and was over eight times the capacity of PV installations in 2006.

California stayed the state with the most installations, largely thanks to a 10 year, $3 billion program called "Go Solar California" that started in 2007. The state also has a steadily increasing RPS requirement mandating that a certain fraction of the electricity supply be provided by renewable energy. It is planning for 20% by 2013, and 33% by 2020 (Connecticut will be requiring 27% by 2020). In contrast, states like Kentucky with no solar RPS policy or few incentives also have relatively few installations.

In 2011, analysts expect there to be continued growth for the solar market, especially for grid-connected PV systems. Installations doubled in nine states, and will spread to more. As in the past, growth for this market will be predominantly determined by federal and state incentives.

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