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North American solar market set to double in Q4

A report released November 29 predicts that the North American PV market will double from Q4 2010 to Q4 2011.

The North America PV Markets Quarterly report was produced by NPD Solarbuzz, a market research firm focusing on the photovoltaic industry. The report forecasts 33 percent quarterly growth and 101 percent annual growth in the North American solar market, with the U.S. accounting for 84 percent of that increased demand.

California will retain leadership in the U.S., with 21 percent market share, while Ontario will have 16 percent and New Jersey 11 percent. Installations of over 0.8 GW of capacity are expected in the fourth quarter of this year, totalling 2.2 GW of installations for 2011.

These findings come on the heels of the recent news that the U.S. PV industry exhibited record growth in the third quarter of 2011.

Despite the optimistic forecasts, however, the report notes that declining solar incentives, module over-supply and changes in international PV market dynamics creates uncertainty for the state of solar in 2012.

Photo Credit: First Solar

Policy Uncertainty

First, the Treasury 1603 Program is set to expire on December 31, 2011. The program reimburses companies for a part of the cost of renewable energy installations in lieu of tax credits. Part of the 2009 economic stimulus package, Treasury 1603 has already been extended.

Supporters of the program have been urging Congressional leaders to again extend the program. They claim that allowing the program to expire will decrease financing available for energy projects by 52 percent over the next year, while extending the program for a year will create an additional 37,000 jobs in the solar industry alone.

During a hearing at the Senate Subcommittee on Energy, Natural Resources, and Infrastructure, Energy and Natural Resources Chair Jeff Bingaman (D-NM) said that “[a]llowing these incentives to expire will negatively impact this country’s ability to develop alternative energy resources.”

However, according to Solar Server, the hearing was sharply divided along party lines and the two sides did not reach a consensus.

All in all, extension of Treasury 1603 for another year is looking unlikely. And even if the program will be extended in the first months of 2012, rather than at the end of 2011, Rhone Resch of the Solar Energy Industries Association says “projects are going to be cancelled, businesses are going to cut new investments, and jobs are going to be lost.”

International Competition

Another source of instability is the brewing conflict between Chinese and U.S. solar producers.

In October, a group of U.S. PV firms called the Coalition for American Solar Manufacturing (CASM), filed formal complaints with the U.S. Department of Commerce and the U.S. International Trade Commission (ITC) requesting an investigation into Chinese PV trade practices.

Despite opposition from another U.S. industry group, the Coalition for Affordable Solar Energy (CASE), both Commerce and the ITC have taken up the claims. By mid-2012, these bodies will deliver preliminary rulings that could result in tariffs of up to 100 percent on Chinese-made PV cells.

Meanwhile, China’s Ministry of Commerce has not taken these actions sitting down. In late November, the Ministry announced it’s own investigation into U.S. subsidies to renewable energies, threatening to take the case to the World Trade Organization.

According to NPD Solarbuzz, there is “evidence that some Chinese manufacturers and project developers have already started to delay shipments and installations” in response to the anti-dumping dispute.

Continued Growth, Nonetheless

The report says the following year will see “significantly more downstream uncertainty than normal,” and that the aforementioned issues will slow growth for 2012. However, the North American market “is still forecast to triple in size by 2015.”

Showing confidence despite obstacles, Craig Stevens, President of NPD Solarbuzz, said that “PV is now positioned to take significant market share from other energy sources as it approaches grid parity in some regions.”

“Downstream companies are facing enormous challenges to adapt to rapidly changing channel structure and business models in order to successfully participate in that opportunity,” he said.


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