US Solar PV Sizzles In First Quarter Of Year

It was another bang-up quarter for U.S. solar, with 723 megawatts of new capacity installed in the first three months of the year, according to an industry report released today. That was a 33 percent increase over the same quarter in 2012 and drove total capacity to just shy of 8 gigawatts. Nearly half – 48 percent – of the new electrical generating capacity installed in the U.S. in the quarter was solar power.

This steady growth – particularly of distributed or “behind the meter” installations – makes it clear again that solar, despite still comprising a tiny percentage of electricity production, is fast become a disruptive force in the U.S. energy picture.

image via GTM Research, SEIA

image via GTM Research, SEIA

“We are on the cusp of a new solar revolution in the U.S., driven by the rapid expansion of distributed generation,” Shayle Kann, vice president of research at GTM Research, said in a statement that accompanied the release of the new data. “Installations will speed up over the next four years as projects become economically preferable to retail power in more locations. However, changes to net metering and electricity rate structures could serve as the market’s primary barrier to adoption.”

The report said that from the first quarter of last year to the first quarter of this year, the cost of residential systems fell 15.8 percent, from $5.86 per watt installed, to $4.93.

With the economics of solar now favoring homeowners in many places in the country, the issue of how distributed generation might impact utility companies is a topic of intense conversation – witness the report [PDF] by the utility trade association Edison Electric Institute. That report said solar photovoltaics – along with battery storage, fuel cells, geothermal energy systems, wind, micro turbines, and electric vehicle (EV) enhanced storage – “could threaten the centralized utility model.”

We saw this issue play out recently in San Antonio, where CPS Energy moved to scale back its metering plan by trimming the credited value of rooftop solar produced by rooftop systems to well under the retail electrical rate. An uproar ensued and the municipally owned company stepped back from the plan, but nobody thinks the issue will go away.

The utilities say that generous net metering schemes fail to take into account the cost of poles, wires, substations and the like – things that all customers, even those who produce more solar than their total power usage, rely upon.

The report pointed to one other possible obstacle to continued high growth rates: the availability of and cost of project finance. It said $48.5 billion would be needed during the 2013-2017 period. But the authors were optimistic that new financing structures – including crowdfunding and community solar – could help overcome that hurdle.

Annual added capacity (image via GTM Research, SEIA)

Annual added capacity (image via GTM Research, SEIA)

So what’s the outlook? It’s that 2013 will finish with 4.4 GW of new installations. For perspective, consider that last year 3.3 GW was added and the total going into this year was 7.2 GW. And annual additions will continue to rise — barring any of the road blocks mentioned — reaching 9.2 GW annually in 2016, the last year of the federal government’s 30 percent investment tax credit. “GTM Research and SEIA have increased each year’s forecast marginally from past editions of the report, due largely to increasingly bullish expectations for the residential market and the near-term opportunity it offers,” the report said.

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.

  • So why don’t the utilities see the writing on the wall, get out of the power production business slowly, but surely, and let the people take over. Then, focus on being the power distributors rather than the power producers? I could live with utilities as distributors, and would even be happy to pay my “fair share” to maintain the grid as a system rooted in local distributed solar (including that produced by our 5.59 kW home system), wind, geothermal — if utilities would stop using distribution as a smokescreen to try to maintain their unfair monopoly on electricity production.

  • Jerry Graf

    At $5.00 per MW, solar is still 5 times more expensive than natural gas generation technologies (Combined Cycle Gas Turbines – CCGT)

    Providing capacity factors of around 14% (maybe), solar PV panels are one sixth as effective at producing electricity as a CCGT system, which could easily provide a capacity factor of 85%.

    For equivalent investment, CCGT provides 30 times (6×5) the annual electricity that solar PV panels could provide.

    Granted burning natural gas in a generating plant still emits CO2; but at a rate that is 50% less than the coal fired plants we still overwhelmingly rely upon. Therefore, by producing 30 times the electricity to displace coal, the CCGT technology is still able to eliminate 15 times more CO2 emissions than the solar PV panels.

    Despite this simple logic, as reported by the EIA, on a per MWh basis we subsidize natural gas and coal by about $0.64 per MWh, and we subsidize nuclear by about $3.14 per MWh. In comparison, we now subsidize solar energy projects by an astronomical $775.64 per MWh. http://jerrygraf.wordpress.com/2013/03/23/energy-subsidies-in-the-usa/

    WHY????

    • Pete Danko

      $4.93 per watt for residential systems (which of course don’t exist for CCGT). Utility solar systems in the first quarter had an installed cost of $2.14/watt.

      • Jerry Graf

        Sorry for the confusion; I put an “M” in where I did not intend it. I meant $5.00 per W (or $5 million per MW). Your figure is $4.93. Here in Ohio it’s more like $6.00. Regardless, CCGT capacity is more like 1 fifth of this cost. And it could be less too, if we invested more development into it.

        I have not seen your utility solar system figure of $2.14 Watt (I will look). The utility scale systems I have seen have been a lot more than this. Regardless, this is still twice as expensive as CCGT, and solar will still generate 6 times less electricity.

        The question remains, why are we subsidizing less efficient systems, that produce less electricity, and eliminate less CO2?

        If we want to support R&D to develop less expensive and more efficient solar panels for the future, this might be OK. But what we are doing instead is giving huge amounts of money (which we do not have) to line the pockets of people selling us ineffective solar panels. This is not R&D, it is simply government largess.