Solar installations surge on strong utility market

LOS ANGELES Mon Sep 10, 2012 6:05am EDT

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LOS ANGELES (Reuters) - U.S. solar installations jumped 116 percent in the second quarter from a year ago thanks to the completion of more than 20 big projects for utilities, according to an industry report released on Monday.

The quarter was the largest ever for utility installations, which represented 447 megawatts of the 742 MW total.

Procurement of utility-scale projects, however, is down, the report said, meaning such lofty figures are unlikely to continue quarter after quarter. That's because utilities in states where they are required to source a percentage of their power from renewable sources have largely met those requirements for now.

"They are under no obligation to sign more (power purchase agreements)," said Shayle Kann, a solar analyst with GTM Research. "So there is a gap period where the utilities wait to see if the projects get completed and before they start up procurement again."

The quarter's total installations was the second-best ever for the U.S. solar industry, behind only the 791.3 MW installed in the fourth quarter of last year, according to the report by GTM Research and lobbying group the Solar Energy Industries Association.

The residential solar market was roughly flat during the quarter, while non-residential installations slid 33 percent from the previous quarter due to a decline in incentives.

GTM revised its full-year installation outlook slightly downward to 3.2 gigawatts from 3.3 GW.

The U.S. market, though robust, still represents just 10 percent of the global market and is unlikely to soothe the pain that solar panel makers have suffered due to an oversupply of equipment that has erased profits.

"It's still not making or breaking the global market," said Kann.

Average sales prices for solar panels slid to 87 cents per watt during the quarter, 44 percent below the previous year's $1.56 per watt.

(Reporting By Nichola Groom; Editing by Tim Dobbyn)

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