June 13 (Reuters) - Solar installations in the United States jumped 85 percent in the first quarter of 2012 from the previous year, according to an industry report that prompted a research firm and a lobbying group to raise their capacity forecasts for the year.
That growth comes despite the pain solar panel makers around the globe have suffered in recent months as an oversupply of equipment nearly erased their profits and sent their share prices tumbling.
A total of 506 megawatts of solar power capacity was added during the first three months of the year, the second highest quarterly total to date, according to the report by GTM Research for the Solar Energy Industries Association.
The spike in capacity came as a surprise because the period is usually the weakest of the year.
“This really shows the beginning of what we think is going to be a breakout year for the U.S. solar industry,” said Rhone Resch, president of the Solar Energy Industries Association.
Part of the first-quarter’s growth was likely to due to solar developers finishing projects that qualified under a U.S. grant program, which expired at the end of 2011. Those projects could help keep installations strong through the middle of the year.
The figures were released just weeks after the U.S. Commerce Department ruled that Chinese manufacturers had ‘dumped’ solar equipment on the U.S. market and it imposed new tariffs on imports of solar equipment from China, the world’s top manufacturer.
That move drew a rebuke from Beijing and prompted some solar analysts to predict that prices in the United States could rise as China’s companies targeted other markets, hurting the industry’s efforts to wean itself off subsidies from Washington.
But, at least for the early months of 2012, the U.S. market showed no signs of slowing.
“The U.S. market is robust, and none of the global dynamics that are playing out are going to be a market killer for the U.S.,” said Shayle Kann, vice president of research at GTM Research in Boston.
“Import tariffs will have an impact, but I don’t think you’re going to see the market shrink anytime soon.”
GTM said that following the first-quarter data, it had raised its forecast for U.S. installations to 3,300 MW this year, up from the 2,500-2,800 MW, it had predicted in March.
That figure is well above the 1,855 MW of solar panels that were installed in the United States in 2011.
That would likely make the country the fourth-largest market in the world this year, with about 11 percent of the world’s total.
Germany, the world’s top solar market, has also posted a better-than-expected 1,800 MW of solar installations in the first quarter.
New Jersey took the lead in new U.S. installations during the quarter, adding 174 MW and topping California, the country’s largest solar market, which added 148 MW.
Prices to install the renewable energy systems also continued to march lower, largely due to the steep 47 percent drop in panel prices from a year earlier, according to data released by the GTM.
While panel prices fell to 94 cents a watt, breaking below $1 for the first time, the total installation cost declined by far more modest levels.
Utility-scale solar costs fell 24.7 percent, while commercial-scale projects, which are typically installed by companies or municipalities, dropped 11.5 percent.
Costs for residential solar systems fell 7.3 percent, even as the year-over-year installation volume rose by nearly a third.
Those home rooftop systems remain the smallest segment of the solar market, but have shown steady growth in recent years, helped by the introduction of the solar lease programs from several companies.
The lease programs allow homeowners to make a make monthly payment to a solar installer rather than paying for the total cost of a new system up front.