Prices, Incentives Drive Up Solar Demand

A great third quarter and a “banner” year – that’s the assessment of the performance of the solar industry from its very own national trade association, which cited a big jump in installations driven by government support and a continued decline in system costs.

The Solar Energy Industries Association (SEIA) said 188 megawatts (MW) of photovoltaic (PV) systems were installed in the third quarter of 2010, bringing the total for the year to 530 MW. “Already,” the group reported, “this represents 22 percent growth over the 435 MW installed in 2009 – and the fourth quarter will only add to this total.” In fact, the SEIA is forecasting a “late-year surge” in installations that will push the 2010 total to 855 MW.

solar farm

image via PG&E

Support from federal and state governments was key to the gains, the SEIA said, noting in particular the Section 1603 Treasury Cash Grant Program that, after vigorous industry lobbying, recently won an extension through 2011.

Prices, too, have been a factor in encouraging demand. “Alongside support from state and federal policies, nationwide growth is being propelled across residential, commercial and utility-scale market segments by the continued decline of average system costs,” the SEIA said in a press release, “which the report finds were below $6/watt in Q3 for the first time, or 8.5 percent less than Q1 averages.”

Solar installations, Solar Industries Trade Association

image via Solar Industries Trade Association

Not surprisingly, California led the way in installing solar-power systems, gobbling up more than a third of the installed capacity in the quarter. New Jersey, Florida, Arizona and Colorado followed.

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Pete Danko is a writer and editor based in Portland, Oregon. His work has appeared in Breaking Energy, National Geographic's Energy Blog, The New York Times, San Francisco Chronicle and elsewhere.