32 July/August 2011 SOLAR TODAY solartoday.org
solar water heating
sees Modest increase
GTM Research and the Solar Energy
Industries Association estimate that solar
water-heating installations increased by 6
percent in 2010, compared with 2009. Solar
water-heating has shown only two years of
strong growth in the last 10 years. In 2006,
solar water-heating installations more than
doubled compared with 2005. That year,
the residential federal investment tax credit
(ITC) was established and the commercial ITC increased. Then in 2008, installations grew by 56 percent compared
with 2007. In 2008, the federal government removed the cap on the amount
of the federal ITC a residential customer
can receive. The solar water-heating markets respond when federal incentives are
increased, but, unlike the case with photovoltaic installations, market demand
does not sustain high growth rates. (See
figure 3.)
State rebates and other incentives
have increased in recent years. Arizona,
California, Connecticut, Florida, Hawaii,
Maryland, Oregon, Pennsylvania,
Vermont and Wisconsin all provided
rebates for more than 100 systems in
2010. However, these programs are
not spending enough money to affect
much growth in national installations.
California has a new solar thermal
program as part of its California Solar
Initiative. Because the program only
operated for a few months in 2010, it did
not affect the numbers much. However,
it is expected to rapidly increase the
number of solar hot water installations
in the state in coming years.
In 2009, 79 percent of total solar
water-heating installations were on
residential buildings. In comparison,
residential installations were only 29
percent of the total PV installations in
2010. Diversification in different market
sectors has helped PV growth sustain
itself year after year. Likewise, a positive
development for solar thermal is the
emergence of a market for solar thermal
process heating systems, which use solar
thermal energy to provide energy for
industrial process uses. This market in
2009 was about one-quarter of the solar
hot water market. These are installations
The utility sector’s share of all
U.S. grid-connected PV installations
grew from virtually none in 2006
to 15 percent in 2009 and
32 percent in 2010.
on industrial or commercial establishments
and include some third-party power purchase agreement (PPA) systems. Since the
PPA ownership model has been key to the
growth of the non-residential PV market, it
will be interesting to see how it affects the
solar thermal market’s growth.
In other solar thermal sectors, pool-heating installations increased by 13
percent, the largest improvement in five
years. The solar pool-heating market has
been soft for years, due to the weak
real estate markets in California and
Florida.
Copyright © 2011 by the American Solar Energy Society Inc. All rights reserved.
growth will continue in 2011
What can we expect in U.S. solar
markets this year? As of this May
writing, early indicators point to con-
tinued grid-connected PV growth and
the continuation of the 2010 trend of
higher growth rates for utility-sector
installations. Reductions in PV mod-
ules prices, long-term extension of
the federal ITC, new rules that allow
electric utilities to use the ITC and
the continuation of the grant alterna-
tive to the commercial ITC will all
help drive market growth. In addi-
tion, improved capital availability will
allow customers to take advantage of
these financial incentives.
Companies have announced plans
for many large solar projects, including solar thermal electric projects,
utility-owned projects and third
party-owned projects. Some of these
projects will be completed in 2011,
and many more will start construction
in 2011 to take advantage of the federal cash grant program. Completion
of these later projects will likely occur
in 2012 and 2013.
Prices for PV modules fell in 2009
and 2010, and many analysts expect
prices to continue to fall in 2011.
Lower PV prices increase the potential of installations in states without
state or local incentives. The number
of states with strong markets continues to grow, although installations in
2011 will continue to be concentrated
in states with strong financial incentives. Strong solar policies remain
critical to market growth. ST
