2013 Solar Trends Update

At the end of April the U.S. Energy Information Administration (EIA) released data showing that solar energy continued to grow at a blistering pace in 2013.  The EIA highlights that installed U.S. solar capacity has grown 418% over the past four years.   According to the EIA the U.S. now has over 12,000 MW of installed solar capacity.  The EIA total includes net metered residential and commercial installations and utility systems larger than 1 MW; including over 1,000 MW of solar thermal.  In this case solar thermal refers to large scale electricity generating installations such as the 377 MW Ivanpah Solar Electric Generating System that came online last year in California’s Mojave Desert.

 Solar_Capacity EIA

The U.S. Solar Energy Industries Association (SEIA) 2013 Year-In-Review Report adds greater detail to the long-term trend for solar PV (photovoltaic) systems.  According to the SEIA 4,751 MW of solar PV was added in 2013, representing a 41% year-over-year increase.  Fourth quarter installs continue to be recording setting for solar PV with 2013 shattering last year’s record by 60% to reach 2,106 MW.  Some other numbers from the SEIA report that put this growth into perspective:

  • More solar PV was installed in the 18 months encompassed by 2013 and the latter half of 2012 than the previous 30 years combined
  • Weighted average solar PV system costs fell 15% in 2013
  • $13.7 billion was invested in solar PV in 2013

Though the overall growth trend in solar continued in 2013, where the growth is occurring has changed.  Over the past decade solar PV growth was largely driven by commercial/non-residential installations.  In 2011 utility and non-residential installs were roughly on par for the first time, and in 2012 they crossed over with utility installations exceeding non-residential by 68%.  In 2013 this trend exploded with utility-scale installations exceeding non-residential by over 156%.  Utility solar ended 2012 with 58% year-over-year growth; with demand largely driven by state Renewable Portfolio Standards (RPS).

04-13 Solar PV Chart v3

SEIA: U.S. Solar Market Insight Report | 2013 Year-In-Review

System prices continued to fall in 2013, but the main driver for reductions was no longer falling PV module prices.  According to the SEIA report module prices increased for the first time since 2008.  Falling prices for inverters, racking systems, and other system costs drove down the weighted average system cost 15% to $2.59/W compared to 2012.  Utility system prices ended 2013 even lower at $1.96/W.  A 2012 study of PV system prices done by the National Renewable Energy Laboratory found that panels are typically 45% of the total cost of a commercial rooftop installation; so there is still plenty of room for the Balance of System (BOS) costs to drive down the overall price.

The outlook for solar PV in 2014 remains strong.  The SEIA projects overall PV growth of 26% in 2014, with total annual installs reaching 6,000 MW.  There are a number of factors that continue to drive growth.  The rush to capture the 30% Federal Investment Tax Credit before it drops to 10% in 2017 will help drive growth in the short term.  Falling prices will play a role as well, helping to sustain longer term growth.  Delivered solar prices ended 2013 at just over $0.11/kWh according to the Department of Energy (DOE).  The DOE’s SunShot Initiative is focused on finding ways to drive down overall system costs to reach a delivered cost of $0.06/kWh by 2020 for utility scale solar; making it cost competitive with many traditional forms of electric generation.

Resources: Solar PV at Grid Parity in 10 States According to Deutsche Bank