Growth in grid-connected installations has been
especially strong, with 46 percent growth
in 2007 and 53 percent in 2006.
benefits. The third party then sells the solar-generated electricity to the building or site
owner through a long-term contract.
The average size of a residential installation increased 7 percent to 4. 8 kilowatts, and
the average nonresidential installation
increased by 27 percent to 67 k W. A total of
30 systems each larger than 500 k W accounted for 29 percent of the 2007 installed capacity. In 2005, such large systems accounted
for only 12 percent of the installed capacity.
The trend toward greater market share for
large installations should continue at least
through 2008. At the end of 2007 in California, 56 percent of the California Solar Initiative incentive reservations were for installations 500 kW and larger. The federal
investment tax credit (ITC), set to expire at the
end of 2008, is critical to make these deals
financially viable. If Congress renews the ITC,
the trend for more PPAs and larger nonresidential installations will likely continue.
In several states, regulators are considering defining third-party owners of solar
equipment as utilities. If such rulings are
made, third-party owners in these states may
still be able to lease solar facilities without
being labeled as utilities, but their ability to
use the investment tax credit will need to be
clarified. If the tax credit cannot be used as
readily under the leasing model, PPAs will
become less viable in these states and the
growth of solar installations in these states
will be constrained.
So where are these systems being
installed? California continues to dominate
the U.S. market, with 58 percent of the market, but annual installations grew an impressive 83 percent outside California. Nevada,
Colorado, Hawaii, Connecticut and Oregon
doubled their annual installations compared
with 2006. All of the top 10 states have major
state or utility incentives for PV installations.
Top 10 States for Grid-Tied
Photovoltaic Installations in 2007
Capacity
State (megawatts-dc)
1. California ...............................................87.1
2. New Jersey ............................................. 16. 4
3. Nevada ................................................... 14. 6
4. Colorado ................................................. 12. 5
5. New York .................................................. 4. 4
6. Arizona ...................................................... 2. 8
7. Hawaii........................................................ 2. 4
8. Connecticut ............................................1.8
9. Massachusetts ..........................................1.4
10. Oregon ...................................................1.1
All Others ..................................................... 5. 6
Federal Incentives Spur
Solar Water Projects
In 2006 new federal tax credits, together
with rising conventional energy prices,
caused the solar water-heating market to
explode. Prior to 2006, about half of the solar
water heaters sold each year in the United
States were in Hawaii due to that state’s utility rebates, state tax credits and high energy
prices. In 2006, national installations were
2. 4 times the number in 2005, and installations outside Hawaii quadrupled.
In addition to Hawaii, Florida and California lead the states in solar water-heating
installations. Hawaii is likely to remain a
leader in this technology. In May, the state
legislature passed a measure requiring that all
homes built after 2010 in Hawaii be equipped
with solar water heaters.
Solar Thermal Electric
Makes Comeback
Last year saw a major reemergence of utility-scale solar thermal electricity, as Nevada
Solar One, a 64-MW plant, went online in
Boulder City, Nev. Combined with a 1-MW
plant built the previous year in Arizona, these
two plants mark the first U.S. solar thermal
electric installations in more than a decade.
Previously, the last solar thermal electric
installations took place in the late 1980s and
early 1990s. Those plants, comprising 354
MW, continue to operate today.
Expect to see more solar thermal electric
installations in the future. Developers have
announced plans for installations totaling
thousands of megawatts, promising to bring
solar electricity to millions and reducing its
cost dramatically.
Will Feds Act, or Stall Growth?
The combination of financial incentives,
rising prices for conventional energy and
improving solar technology means last year’s
growth should continue. Uncertainty concerning the fate of the federal tax incentives
poses the largest challenge in the short run.
New contracts for larger projects are on hold
pending extension of the incentives. That
means project installations will likely slow in
early 2009. Conversely, project installations
this year will be brisk as everyone tries to get
installations completed before the federal
credits expire in December. ●
Larry Sherwood (larry@sherwoodassociates
.com) is president of the consulting firm Sherwood Associates. The solar data reported here
were collected for the Interstate Renewable Energy Council (IREC) as part of a grant from the
U.S. Department of Energy. A full report on the
data will be published soon and will be available on the IREC website ( irecusa.org). Previously, Sherwood served as executive director of the
American Solar Energy Society.
