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Solar reports say industry is booming, with falling prices and heavy Chinese manufacturing

December 16, 2010 | 10:41 am

Solar As it waits for Congress to decide whether to extend a key government incentive program, the solar industry revealed several reports on industry performance so far this year -– and the numbers are looking healthy.

The Solar Energy Industries Assn., a major trade group, said that commercial solar customers in the U.S. installed 103 megawatts in the third quarter, a 38% boom from the same period in 2009.

Overall, more than 27,000 homes and businesses set up solar systems, according to the group, which partnered with GTM research. The average cost fell to below $6 a watt for the first time.

By the end of the year, the U.S. industry might surpass one gigawatt of installtions, between photovoltaic, concentrating solar power, and solar heating and cooling projects, the group said. So far, California is leading the pack, followed by New Jersey, Florida, Arizona and Colorado.

Globally, demand for just photovoltaics grew 196% to 10.6 gigawatts in the first nine months of 2010, according to the SolarBuzz research and consulting firm. In the third quarter, the industry pulled in $17.9 billion –- a 74% increase.

Asian manufacturers will lead the charge next year. Already, Chinese companies produced 66% of the world’s panels, up from a 50% share the year before. Of the 12 top cell manufacturers, Chinese and Taiwanese firms took up eight spots, with JA Solar of China in front.

But as major policy changes take effect in 2011 in Europe, the industry will watch its growth slow overall, even as excess production causes the price of solar modules to plunge 15% over the next year.

Read on:

Already in the U.S., the average cost of photovoltaics has fallen 30% from $10.8 a watt in 1998 to $7.5 a watt in 2009, according to a new report from the Department of Energy’s Lawrence Berkeley National Laboratory.

Costs are still falling steeply this year -– about $1 a watt, based on data from 78,000 residential and commercial systems across 16 states. Researches said the slide was likely caused by a combination of government incentives and declines in the cost of labor, marketing and overhead.

Though the average size of state and local incentive programs fell, federal stimulus funds helped fill in the difference. After government help, the average “installed cost” for residential solar systems dropped 24% from 2008 to $4.10 a watt in 2009.

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-- Tiffany Hsu

Photo: Employees inspect newly made solar panels on the roof of a Sungrow Power Supply Co. Ltd. factory in China. Credit: Reuters

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