Imagine 16 million solar panels blanketing large pieces of land and covering roofs of homes and businesses. That was the number installed in the United States in 2012, when 3.3 gigawatts of the solar equipment materialized to representing a 76% annual growth.
Cumulatively, the country had about 7.2 gigawatts of solar generation capacity from solar panels by the end of 2012, according to a report by GTM Research the Solar Energy Industries Association. That capacity doesn’t mean consumers could tap that much power from solar power projects. The amount of production depends on whether the sun is up and unobstructed by clouds.
The size of the U.S. market grew 34% to $11.5 billion in 2012 from $8.6 billion in 2011. Major solar panel makers include First Solar, Suntech Power, Trina Solar, Sharp and SunPower.
“The U.S. market has grown impressively year over year for a while now,” said Shayle Kann, vice president of GTM. He noted that the new solar capacity the country added last year accounted for 11% of all new solar installations worldwide, a marked jump from the 5-7% it historically occupied.
The U.S. is one of the fast-growing solar energy markets in the world, thanks in part to the generous federal tax benefits, loans and grants to support solar technology development and deployment. On top of that, over half of the states require their utilities to sell an increasing amount of renewable electricity.
The declining prices for solar panels in recent years have helped to make them more attractive. The fall — 28% for wholesale silicon solar panel prices — came largely as a result of a global oversupply of solar panels and a fierce competition. While project developers and consumers benefit from the lower prices, dozens of manufacturers have filed for bankruptcy or needed financial rescues to stay alive.
The average price for solar panel systems across all market segments decreased 27% in 2012 from 2011, the report said. The average price for a system built for homes reached $5.04 per watt; $2.27 per watt for projects built to serve utilities; and $4.27 per watt for other types of businesses, government agencies and nonprofits.
Residential systems tend to be more expensive because they are smaller in size (5 kilowatts is typical), yet they still need local government and utility permits for each installation.
State mandates for renewable electricity have fueled the growth of utility-scale projects, the largest of which are materializing in western United States, particularly in California, Arizona and Nevada. In fact, eight of the 10 largest working solar power plants finished construction in 2012. Overall, project developers completed 152 utility solar projects in 2012, and that represented 54%, or roughly 1.8 gigawatts, of the solar panels installed that year.
As the solar energy market grows bigger, its growth rate is likely to slow. GTM and the solar industry group are predicting a higher amount of new solar power generation capacity in 2013 than the year before, but at 4.3 gigawatts, it will represent a 30 percent bump.