Although a new and detailed report from GTM Research doesn’t give much credence to more than 20GW of announced PV projects in the U.S. in the coming few years, the report’s author, Shayle Kann, does see some significant developments on the horizon. According to report, The U.S. Utility PV Market: Demand, Players, Strategy and Project Economics Through 2015, the utility PV market is already a US$1 billion market in 2010 and is projected to reach US$8 billion by 2015.
The report couldn’t have come at a better time as the PV industry remains divided over the impacts of feed-in tariff cuts in some of the major European markets. Major utility PV players in the U.S. such as First Solar and SunPower have already outlined significant pipelines and aggressive installation rates for 2011, while noting an expected softening in markets such as Germany as the reason for the geographical switch in business prospects next year.
According to GTM Research, First Solar has more than 40% of all contracted PPA capacity in development in the U.S., while SunPower, Sempra Generation, LS Power and SunEdison make up a combined 22% of contracted capacity.
“Foreign entrants like Iberdrola Renewables and juwi solar, with robust PV portfolios abroad, are parlaying their experience to earn utility market share stateside,” commented Kann. “In addition, PV manufacturers such as Sharp, Solyndra, and GCL Solar are seeking their own entry into the project development market, often as an opportunity to secure sales channels for their own products.”
Although Kann noted that key PV players were “flocking to the market en masse to take advantage,” success may not be achieved without taking account of the fact that sub-20MW-scale projects compris e only 10% of the total contracted capacity, yet they represent 70% of the total number of projects planned.
Also, that other states outside of California are also starting to become major utility-type markets. States such as New Jersey have a significant required procurement through 2015.
The report actually details all of the states with important procurement requirements over this period, essential when this is a decentralised market and a large number of utilities.
Indeed, the report highlights that many PV players fail to consider the ‘long tail’ of utilities, i.e., the large number of utilities that have signed only one or two PPAs, while it has been only a small number that have planned large and multiple PV power plants.
Kann noted that should only 10% of the 3,000-plus utilities in the U.S. signed just a single PV contract, the U.S. utility PV market would immediately become the largest in the world.
The potential inclusion of all these utility providers means that the U.S. market could not only add depth, but much needed diversity, especially important to new market entrants wanting to compete with growing behemoths such as First Solar and SunPower.