Despite a slow start for the US solar photovoltaic (PV) market, the year will recover sharply to end with “frantic buying”, according to a leading analyst.
“2011 could very well be a US 1.7 [gigawatt] inventory for the US that flows into 2012,” Paula Mints, principal analyst at Navigant Consulting, said.
Tax equity markets and state Renewable Portfolio Standards have helped fuel an initial boom in PV demand in the US. But Mint told the Intersolar conference in San Francisco that a slowdown in sales in 2012 would actually be welcome and could potentially rebalance the market after the frantic incentive-driven buying the firm expects.
“The grant in lieu of the [investment tax credit] will expire at the end of the year – that’s going to lead to frantic buying in the US at the end of the year. It’s just the way the markets work and for an industry that has to live and die by incentives you’ve just got to do what you’ve go to do,” she said.
Navigant has analyzed solar shipments (sales) to point of sale–from raw material to installations–since 1974.
She said: “I see over time all the way to back to the start of the terrestrial solar industry that it is starting to go sluggishly along, because when things boom, what happens next?”
Clouds Along The Jersey Shore
New Jersey has seen significant growth in PV solar installations.
The state 15.54 MW of solar installed last year, and 7.69 MW already installed this year. But that rate of growth has come under threat since New Jersey Governor, Chris Christie, withdrew the state from the Regional Greenhouse Gas Initiative that provides a price on carbon emissions in a group of Northeastern US states, and the Renewable Portfolio Standard requiring a share of electric generation come from renewable sources has been reduced to 22.5% from 30%, she said.
“I have a question mark about that market right now,” she said, adding that the US solar market would continue to be driven by California.
“States that are on the western grid are primed to be strong markets in the future when they work out transmission, RPS and incentives issues because they are going to sell into California. Arizona, for example, has a small population but will sell into California.”
“The biggest issue is transmission and who is going to pay for it? It’s likely to be picked up by the installing companies,” Mints said.
Mints also said that huge inventories of solar cells and equipment in China would continue to drive down prices. But she said that a recent IEEE prediction of $1.09/watt was unrealistic.
“That is frankly absurd. It’s not going to happen. If you’re an installer, don’t be waiting around for a dollar a watt. It’s an unhealthy price.”