US solar market may grow tenfold

Despite a challenging domestic economic environment, the US solar market grew 36% in 2009, according to the United States PV Market 2010 from Solarbuzz, part of the NPD Group.

This growth was not nearly as strong as the region’s 62% growth in 2008. On a global scale, the country was ranked third largest solar photovoltaic market, behind Germany and Italy.

“2009 marked a year of transformation for the US solar market,” noted Craig Stevens, President of Solarbuzz. “Changes in the roles of utility companies, new market entrants, lower cost PV modules from Asia and new direct-to-market approaches became more prevalent. As a result, solar companies doing business in the states will need to adapt quickly to these challenges while also being responsive to frequent adjustments in the fragmented incentive and regulatory environment.”
California continues to play a critical lead as the base load state market for the US. The state accounted for 53% of US PV on-grid installations and is expected to maintain its strong position in 2010. Despite a slowdown in demand from the corporate sector across the US, government, residential and utility growth more than offset this effect.

Price cuts in residential installations provided the foundation for steady growth across the country. A wide range of start-up markets in other states is well underway as new PV incentives were launched.

Within the next five years, Solarbuzz forecasts the market will grow to between 4.5 to 5.5 GW depending on the scenario. This is around 10 times the size of the 2009 market, an average annual growth rate of 30%.

The key drivers of this outcome will be much more aggressive positioning in the utility segment based on the need to meet their renewable portfolio standard obligations, the development of new state markets together with the return of the corporate segment and steady growth in residential demand stimulated by cuts in end-market pricing.