U.S. has great 2011 for new solar projects, but next year may be weaker

New U.S. solar installations
New U.S. Solar installations
A recent research report from the Solar Energy Industries Association (SEIA) and GTM Research showed that 2011 was a great year for new solar installations in the U.S., with new installations totalling 449 megawatts of photovoltaic power generation in the third quarter alone.   The new solar installation total so far for 2011 (Jan thru Sept) is already over a gigawatt, at 1046.2 megawatts, easily surpassing the 2010 total of 886.6 megawatts.   And it looks like the fourth quarter will be even larger, so 2011 is turning out to be a banner year for U.S. solar energy.

So what’s driving the increase?    A number of factors such as  “utility-scale project completions, a strong residential market, effective policies and the plummeting price of solar panels.” But next year isn’t looking as rosy.  The report is cautioning 2012 will bring ” substantial market uncertainty with financing and political risks, including the looming expiration of Section 1603 Treasury Program.”   The Treasury’s 1603 program provides tax grants for solar projects, and it is currently due to expire on Dec 31st of this year, unless Congress extends it.   Without an extension, the report warns that,  “there will be a tax equity bottleneck for projects in 2012, leading to a possible slowdown in installations in late 2012 and into 2013.” Some of the growth in installations expected in the fourth quarter of this year (2011) will be due to developers rushing to complete projects in the fourth quarter in order to qualify for the 1603 grant.  So even if the program does get extended, there could be a temporary slowdown in new installations in early 2012 due to the current uncertainty.

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