The Solar Energy Industries Association (SEIA) released a report earlier today on solar market behavior in 2009. “US Solar Industry: Year in Review 2009″ (PDF) reveals some sobering truths about the effect the recession had on the growth of solar energy in the United States–but also showed that the residential solar sector doubled in size.
Home solar installations comprised in large part the 37 percent growth in total installations over 2008. Solar hot water heating didn’t do quite so well, but still managed a respectable 10 percent growth over 2008. However, solar pool heating–often considered a luxury item and not eligible for many of the same incentives as other solar energy systems–fell by 10 percent.
And during the year of high unemployment rates and financial hardship for many Americans, the SEIA report says that the solar industry was doing its part by providing clean energy jobs: “In total, the solar industry and its supply chain now support roughly 46,000 jobs in the U.S. With growth expected to continue, that number is likely to surpass 60,000 by the end of 2010.”
Federal tax incentives and state regulations were credited with driving growth across all sectors. American Reinvestment and Recovery Act (ARRA) funds have found their way into many state budgets to support clean energy programs, so the two are heavily intertwined. California solar continued to lead the way with the most new installations (220 megawatts) and the highest overall solar capacity (1,102 mW), while New Jersey was a firm runner up (57 mW and 128 mW, respectively).
Effects of the economic downturn were most clearly seen in total grid-tied solar electric growth, which at 38 percent “fell short of the 84 percent growth in 2008.” Yet cost continued to fall dramatically–although home solar installations are more labor-intensive than large commercial systems and therefore more expensive, and industry growth relied heavily on the residential sector in 2009, installation costs still fell by about 10 percent overall. This is because solar module prices have been decreasing sharply due to technology advances and cheaper materials; because solar panels account for such a hefty percentage of total cost, any significant change in their market value will be reflected in the end cost to the consumer.
The SEIA report predicts that 2010 will be a banner year for solar growth in the U.S. The industry group is pushing hard for the federal government to extend its current alternative to the 30 percent tax credit for commercial solar installations–with tax equity at a nearly all-time low, the traditional investment tax credit is of little or no use for most businesses. To address this, it’s currently possible to receive an equivalent amount as a grant. If this alternative expires as planned at the end of the year, it could put a damper on larger-scale solar moving forward.
All things considered, the solar industry performed remarkably well across all sectors last year. Home solar certainly took the cake, indicating that solar’s unique ability to fill the small-scale distributed generation energy market is becoming more widely recognized and accepted. As more states begin to offer their own solar rebates and as the cost of solar technology continues to fall, we should have many more years of solid growth. A robust solar market can and will play into the health of the American economy in the future. The positive trends even in a year of severe recession demonstrate that this is one industry doing things right.
