PV installations reached a record 723MW in the first quarter of 2013, representing a 45% decline from the last quarter of 2012, but a 33% increase on the first quarter 2012, according to the latest figures released today by GTM Research.
Installation rates were the best in any first quarter for the industry; residential and utility market segments registered first-quarter highs with 164MW and 318MW respectively.
Shayle Kann, vice president at GTM Research, said: “These results were almost exactly in line with what we expected for this quarter, but we incrementally increased our forecast 2013 from 4.3GW to 4.4GW.
“Generally, the increase was due to increasingly bullish expectations for the residential market across a number of states. The overall picture is pretty good. The market continues to grow, taking into account seasonality. Generally, you see incremental quarterly growth throughout the year for residential and commercial but utility scale has a huge boom in the fourth quarter, which has been pretty consistent over the past few years.
“The residential market is impressive in how consistently it grows, every single quarter it grows relative to the previous quarter for the past three years independent of seasonal effects. It doesn't see enormous growth all of a sudden but it's very consistent growth.”
The US Solar Market Insight Q1 2013 report found that cumulative operating PV capacity in the US now stands at 7.9GW. Compared with first quarter of 2012, residential system prices fell 15.8%, from $5.86/W to $4.93/W. Non-residential system prices fell 15.6% year-over-year, from $4.64/W to $3.92/W and utility system prices declined from $2.90/W in Q1 2012 to $2.14/W in Q1 2013.
But as the residential market booms with a 53% growth in Q1 2013 compared with the same quarter last year, the commercial (non-residential) sector had a slow start in 2013, down 20% on both a quarterly and annual basis.
GTM forecasts 18% growth in the commercial sector, down from 29% in 2012. But stronger growth is expected to resume in 2014, continuing through 2016. The utility market is expected to enjoy another record year with 2.3GW installed, followed by a flat year in 2014.
Most state commercial and industrial markets shrank quarter over quarter, including California (46%), Arizona (77%), Hawaii (14%), and Massachusetts (43%). The only major state market to grow on a quarterly basis was New Jersey, which installed 65 MW in Q1, up 50% over Q4 2012, the report found.
“It's not necessarily a missed opportunity,” said Kann. “It's all state specific – the commercial market is still generally dependent on some kind of incentive. Those state level incentives vary by location in some places they decrease significantly.
“But there are some markets that we would point to as attractive for growth later in the year – New York is a good example of where there was very little installed the first quarter of the year but when you get to the end of the year it should be quite a big commercial market.”
There were twenty-four utility projects completed in Q1 2013, ranging in size from 1 MW to 79 MW. Four of the five largest projects were the early phases of larger projects to be completed over the next two years. The five largest projects were commissioned in California.
California's residential market also recorded a breakthrough volume of installations without subsidies in addition to the federal Investment Tax Credit. California installed 13.2 MW of residential solar outside the California Solar Initiative programme – the first clear representation of “socket parity”, according to Kann.
“That's a really important dynamic and shows the ability of PV to compete in residential markets in some locations with just the ITC,” he said.
However, the report noted challenges to this “new solar revolution in the US” include risks over net energy metering, changing rate structures and the availability of project finance.
“We estimate that the distributed generation market will require $48.5 billion of investment during the 2013-2017 period, which far exceeds all project finance provided to date,” said the report.
The report also found that the average residential PV system price fell below $5.00 per watt, while the average non-residential system price fell below $4.00 per watt.