The growth in utility-scale PV power plant projects is expected to support another year of record PV installations in the US.

According to a new report from NPD Solarbuzz, the US market is set to install around 4.3GW in 2013, nearly a 20% increase over 2012. Driven primarily by utility-scale projects, the market research firm expects PV installations to surpass 5GW in 2014.

However, NPD Solarbuzz cautions over long-term viability of continued growth in the US market, citing the strong dependence on PV demand from a small group of states and the potential for policy changes that could cut demand.

NPD Solarbuzz noted that nine states will account for more than 85% of all US solar PV demand in 2013.

Chris Sunsong, analyst at NPD Solarbuzz said, “The success of federal incentives and aggressive renewable portfolio standards that were intended to stimulate domestic solar PV installations in the US is now coming under increased scrutiny at the state level. Additionally, states such as New Jersey, Delaware, and Pennsylvania that are heavily dependent on solar renewable energy certificates, or SRECs, are at risk of continued over-supply that threatens to limit new solar PV investments.”

Regional demand

Demand in the second quarter of 2013 is forecast to reach 1GW, with over 70% coming from California, Arizona, New Jersey, and North Carolina. Residential and small commercial rooftop PV installations are expected to account for 18% of this demand, with another 14% from large commercial rooftops.

The utility-dominated ground-mount segment will account for the remaining 68% of new PV demand this quarter.

Currently, utility-scale PV projects in Arizona, California, New Mexico, and Texas are expected to drive US demand above 2.5GW during the second half of 2013.

Strong year-end contributions will also come from Hawaii, Massachusetts, Nevada, New York, North Carolina, and Ohio, according to NPD Solarbuzz.

“The strong commercial and utility-based solar PV being deployed in the US is stimulated by state specific mandates that require solar to meet target levels, or carve-outs, of total energy production,” added Sunsong. “Meanwhile, residential demand is being driven by new third-party ownership models that allow homeowners and businesses to install PV systems with minimal upfront commitments.”