Solar Electric Capacity Grew 37% Last Year — Residential PV Doubles

Electricity generated by sunlight grew 37 percent in 2009 to a total of 2,108 megawatts of capacity nationwide, according to an advance copy of the US Solar Industry Year in Review, to be released today by the Solar Energy Industries Association (SEIA).

Overall solar energy capacity — which includes solar hot water heaters — grew 5 percent to 25,952 megawatts. But that modest figure hid the real action, which was in the photovoltaic panel market.

Residential roof-top PV installations grew by 156 MW in 2009, an astonishing 101 percent increase over 2008. That growth was helped in part by the removal of a $2,000 Investment Tax Credit cap.

PV has seen dramatic declines in the price of panels, declines mirrored in the cost of installing the panels on homes and businesses. Anecdotal evidence, in the form of increased news coverage and advertising campaigns targeting homeowners and small businesses suggested growth that was confirmed in SEIA’s numbers this week.

Overall grid-tied PV grew 38 percent in 2009, less than the 84 percent growth in 2008, due mainly to sluggish demand in the non-residential sector (commercial, industrial and government installations). Nonetheless, grid-tied PV passed the 1 Gigawatt (1,000 MW) level for the first time in 2009.

State by state, California had the most new solar power capacity, with 220 MW of new solar electric installations (including solar thermal electric), followed by New Jersey with 57 MW.

The solar industry also added an additional 10,000 jobs in 2009, according to the report, to a total of 46,000 workers directly or indirectly employed by the industry, as well as an additional 7,000 “induced” new jobs. The large uptick may reflect the dramatic growth in residential installations, which are more labor-intensive per kilowatt installed.

Module prices fall, along with installation costs

Panel prices dropped 40 percent year-over-year in 2009, in large part due to Chinese manufacturing, but also increased manufacturing efficiency world-wide. Average cost of installation of a PV system in the 5 kilowatt range (what most single family homes need) is now about $8.15 a watt, before incentives are figured in.

Outlook for 2010: sunny

The SEIA expects the industry to grow 40 percent in 2010 as the economy shakes off the effects of the Great Recession and as prices continue to fall. There’s also about 17 GW of projects in the pipeline in the US, the report notes, and world-wide demand is growing, including from global leader Germany (3 GW new capacity in 2009).

And in a sign of steady optimism in the sector, venture capitalists invested more in solar power than any other industry in 2009, about $1.4 billion. “For an industry  that had a total U.S. volume of roughly $4 billion, this signals huge optimism about near‐term growth,” the report’s authors wrote.

From the report:

With new  innovations in the installation process, increasing economies of scale and inovative equipment increasing energy yields, the cost reductions are expected to continue. PV is becoming an increasingly attractive and secure investment.

BC (Ben) Upham is a freelance writer based in Los Angeles. He has written for the New York Times, and was a writer and editor for News Communications, Inc., a local paper consortium serving Manhattan. When he's not blogging on green issues -- and especially renewable energy -- he's hiking in the Angeles Mountains or hanging out at El Matador.