Sharp reductions in market prices, combined with the impact of regional and national policies, pushed the North American photovoltaic market to a new quarterly peak with 0.93 GW installed in the fourth quarter of 2011 (Q4'11), according to the latest North American PV Markets Quarterly report issued by NPD Solarbuzz.
The solar incentive policy mix in both the U.S. and Canadian markets drove up demand in large-scale ground-mount systems, which represented 59% of this total. Regionally, the New Jersey, California, Arizona and Ontario markets accounted for two-thirds of Q4'11 demand.
In the U.S., the expiration of the federal cash grant caused an acceleration of project activity to qualify for the year-end deadline. The cash grant was instrumental, supporting 1 GW of PV capacity by the end of 2011, NPD Solarbuzz says. At the state level, the California Solar Initiative (CSI), the nation's largest ratepayer-funded program, received additional funding of $200 million during Q4'11, enabling it to address a long waiting list for customer-side distributed generation.
Following the raising of its renewable portfolio standard (RPS) target, California has started implementing several programs that will stimulate wholesale distributed-generation projects between 1 MW and 20 MW.
On the other hand, continuation of New Jersey's strong Q4'11 growth is under threat due to oversupply of solar renewable energy credits (SRECs). Both New Jersey and Pennsylvania failed to enact legislation to fix the SREC oversupply by revising their RPS solar obligations.
In 2012, U.S. demand growth will be supported by a 25 GW nonresidential and utility project pipeline, NPD Solarbuzz predicts. This total includes projects that qualified for the cash grant that will ship and be installed this year. Residential demand is forecast to grow modestly in 2012, stimulated by lower system prices and lease financing programs, but held back by declining market prices in the five key states that have met their RPS requirements.
According to the report, there will be more restructuring in downstream channels due to changes in the end-market segment mix. Residential demand, fragmented into small state markets, will cause larger downstream companies to exit this market segment while new entrants in the project developer role seek to bring the huge nonresidential and utility project pipeline to market.
‘The key uncertainties on the rate of U.S. demand growth in 2012 relate to the impact of the end of the federal cash grant and approval timetables for large utility-scale projects together with the market impact of states that have met their RPS,’ says Junko Movellan, senior analyst at NPD Solarbuzz.
‘In 2011, the pace of market price reductions was accelerated by the growth in Chinese module supply,’ Movellan continues. ‘The uncertainty caused by the Chinese anti-dumping case started to reshape supply and pricing in Q4'11; the ruling will shape the supply mix [in the second half of 2012].’
In Ontario, large-scale projects completed during Q4'11 had been approved under the province's previous incentive program, RESOP. In contrast, the newer feed-in-tariff (FIT) program had been most successful in spurring approximately 100 MW of smaller-scale residential and nonresidential projects during 2011.
Large-scale systems under the FIT have been slow to start, due mainly to delays in regulatory and program-related approvals. However, advancement in other areas – project financing and execution of product supply agreements – is evidence that these projects are well advanced, and most are positioned for installation during 2012, according to NPD Solarbuzz.
‘The biggest uncertainty in the Canadian market continues to revolve around the outcomes of the Ontario FIT program review that started in October 2011,’ says Michael Barker, analyst at NPD Solarbuzz. ‘2012 demand projections are dependent on the retention of the key elements of the existing program structure, but anticipate rates falling between 10 percent and 30 percent in concert with greater specificity on technology or customer-type goals.’