5 Things You Need to Know about the U.S. Large Scale Commercial Market

» Posted by on Feb 8, 2012 in Blog | 0 comments

5 Things You Need to Know about the U.S. Large Scale Commercial Market

 Photovoltaic solar markets are growing rapidly across the US, thanks to raised consumer awareness about its benefits, ongoing federal government support, state renewable portfolio standards and rapidly declining price of solar panels and systems.

Utilities and large energy consumers are installing large-scale commercial – and utility-scale – solar systems faster than ever.

As a result, PV solar is now the fastest growing energy sector in the US, providing more than 3,300 MW of capacity (SEIA).

 

 


As a whole, the US PV industry added 449MW in 3Q 2011 alone

  • That number is up 39% over Q2 2011
  • Up 140% over Q3 2010
  • Q4 2011 is expected to produce even larger gains

Courtesty of GTM Research

Commercial Scale PV Solar 101

  • 2 types – Small (up to 250 KW) and Large (250 KW-2 MW)
  • Typically installed on commercial rooftops, over parking structures or on available land on or adjacent to the client’s site
  • PPA relationships between site owners and third party system owners create a win-win
  • In a PPA (Power Purchase Agreement) site owners buy power directly from the third party system owner at a rate lower than the rate available from the local utility.

 

#1 – BOS (Balance of System) costs are more important than ever

  • Module prices down more than 40% in 2011
  • BOS costs outweigh module costs for the first time in history
  • Whoever can drive the cost out of BOS – inverters, wires, labor, mounting systems, etc. – wins

 

#2 – Innovation in technology and storage is going to be a big game changer

  • Any innovation that a) drives down cost or reduces waste of energy (e.g. storage, AC to DC conversion, etc.) and b) is scalable is desperately needed
  • The future of the industry – once RPS have been met and federal incentives dry up – depends on this

 

#3 – State RPS programs are key for emerging markets

  • Top 5 US states/markets have already peaked
  • 29 states have RPS in place
  • Most have a Solar/DG set aside
  • If there is no RPS – or discussion of an RPS – there is no solar market in that state

 

#4 – 2016 is a possible “D-Day” for the industry

  • Industry shifting to tax equity funded projects with the sunset of 1603 Treasury Cash Grant
  • Limited tax equity could drive up the costs to finance a solar project
  • Projects that received the 1603 cash grant must be online by 12/21/2014
  • Sunset of 1603 Cash Grant led to record Q4 2011 for installations
  • Federal tax credits (ITC) are slated to expire 12/31/2016
  • What will happen 1/1/2017?


#5 – The market is ALREADY saturated

  • There is great growth potential in the lg. commercial/utility markets in the U.S.
  • And EVERYBODY knows about it
  • European companies are already in the game: Juwi Solar, Acciona, Phoenix Solar etc,
  • Asian companies are flocking as well
  • These companies are bankable and experienced. Asian firms have lightning fast turnaround for bringing products to market and deep pockets to invest in US projects: Hyundai, LG, Samsung, Honda
  • If you want in, you better bring product reliability and innovation – or stay home

 

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