Residential Solar Power System Prices

Residential Solar Power System Prices

Residential Solar Power System Prices

Residential Solar Power System Prices

As of March 2010 solar energy has found its way into an increasingly hugr number of homes in the U.S. While commercial solar power use has always held a much larger part of the solar energy market - residential solar power systems and installations are now 25-30% of the total solar energy market.

Residential Solar Power System Prices

In 2008, the residential market was a little more than a fourth of the total market. The non-residential, commercial and institutional market was the largest portion, with most of the largest installations financed through power purchase agreements (PPAs). In 2009, we do not expect much change in the distribution of the market share between residential, non-residential and utility installations.

Despite the dire press about what is happening in 2009, the reality is that 2009 has been a good year for installations in the U.S. Based on available data for installations to-date, known installations that are in the pipeline, and announced large projects that we expect to be completed by end of year, we estimate a growth rate of 25-40% for 2009. This does not account for projects that remain under construction at the turn of the year. While this growth is slower than the past several years, in which we saw growth rates in the 50-75% range, it is still growth, which is especially good in hard economic times. In looking at individual incentive programs, every program is experiencing healthy growth rates of 25-80%.

In 2010, we expect growth rates for grid-tied PV in the U.S. to accelerate up to and perhaps beyond the growth rates of previous years. Module prices are decreasing, opening up new market opportunities. The federal stimulus is also going to have a big impact. For example, the rules for the cash grant program, which is being offered as an alternative to the federal tax credit, were just announced in July, so most projects under that program will not be installed until 2010. The utility-scale market is projected to grow to 300 MW by 2010. There are also a number of federal installations on the horizon, with direct funding being provided for solar projects on government buildings. In addition to other federal and state programs and the ongoing popularity of incentive programs, all signs point to a good year in 2010. Overall, we anticipate a U.S. grid-tied PV market on the order of 1 GW (1000 MW) in 2010.

This may leave some readers wondering why our expectations for 2009 and 2010 are lower than most projections from other analystsparticularly those that are taking positions in relation to publicly traded stocks. Part of the answer is that the information presented here is based on bottom-up analysis of the market, a much more data-intensive approach than the top-down approach used by many stock analysts.

For further details, you can find the complete presentation and archived recording from the web conference at AltaTerra Research's website. The full conference included state-by-state market data, issues such as financing, module prices and project size growth, trends and connections to solar thermal markets, and key factors driving the market in 2010:

Residential Solar Panels and Prices

Authors: Larry Sherwood, Anneke Hohl, Eric Paul and Jon Guice, PhD, AltaTerra Research

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