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US Solar Poised for $100bn Growth Surge

October 25, 2010

  US Solar Poised for $100bn Growth Surge

Analysis from Bloomberg New Energy Finance shows that the US solar market for
 photovoltaic and solar thermal electricity generation will grow annually by
42% to reach 44GW by 2020 – as long it can attract $100bn of investment in the

Business Wire

NEW YORK -- October 25, 2010

Rapidly declining equipment costs combined with stronger government support
have set the stage for explosive growth in the US solar market over the next
decade, according to Bloomberg New Energy Finance, the world’s leading
provider of research and analysis into clean energy and the carbon markets.
Solar-powered generating capacity – using photovoltaic and solar thermal
electricity technologies – could reach 4.3% of the nation’s power capacity by
2020, depending on the industry’s ability to attract an estimated $100bn of

The US today has just 1.4 gigawatts of installed solar power capacity, ranking
it fifth globally. But that could rise to 44 gigawatts by 2020, according to
Bloomberg New Energy Finance. In a new report, forecast capacity from
large-scale solar thermal projects is projected to rise from 0.4 gigawatts
currently to 14 gigawatts by 2020. For photovoltaics, the group anticipates a
34% annual growth rate to 30 gigawatts by 2020.

Bloomberg New Energy Finance research shows that the cost of a typical
photovoltaic module has dropped by more than half over the past two years.
However, solar power is still expensive compared to other power sources. The
group’s latest analysis places the unsubsidized cost of best-in-class
photovoltaic and solar thermal electricity generation at just below
$200/megawatt-hour -- nearly four times the equivalent cost for a coal-fired
power plant ($56/megawatt-hour) -- and between two and four times the cost of
onshore wind power.

Policy measures such as tax credits, capital expenditure grants, generation
incentives and renewable electricity credits will remain a key driver of solar
uptake in the US for at least the next three years. The current drop in solar
costs is taking place just as such policies are being implemented by the
Federal and various State governments, which is expected to lead to rapid
growth in commercial, utility and residential solar power.

Bloomberg New Energy Finance expects the commercial sector to lead the way
with around half of all photovoltaic installations between now and 2020. After
taking into account incentives currently available, Bloomberg New Energy
Finance estimates that commercial-scale photovoltaic systems can obtain
unlevered returns of 8-14% in states such as Hawaii, Texas, New Jersey, and
Massachusetts. More sophisticated financial structures using leverage,
combined with further drops in the cost of technology and in the scale of
projects, will make commercial-scale solar photovoltaics even more attractive
to investors. By 2020 over 3% of commercial rooftops are projected to have
such systems installed if current incentives are maintained.

Utility and residential systems will each contribute one-quarter of future
installations. Photovoltaic systems can compete better on a retail level than
on a wholesale level as retail electricity prices are significantly higher and
solar photovoltaic modules can be installed at the user’s location, rather
than centrally. Bloomberg New Energy Finance expects residential-scale solar
to have been installed on 2.4% of US houses by 2020.

In its analysis of returns available to investors, Bloomberg New Energy
Finance found that the amount of sunshine (known as ‘insolation’) alone is a
poor indicator of system returns by State: high electricity prices and
generous incentives are far more important.

“Policy, rather than sunshine, will remain the US’s greatest solar resource
for the next few years," said Milo Sjardin, Bloomberg New Energy Finance’s US
head of research. "By the middle of this decade, however, the US retail solar
market will be driven by fundamental, unsubsidized competition, which should
transform the US into one of the world’s most dynamic solar markets.”

Michael Liebreich, chief executive of Bloomberg New Energy Finance said:
“There is a very positive growth story for solar in the US: a few more years
of support, and then the engine of unsubsidized competitiveness will take over
– and the world will never be the same. The important thing right now is to
ensure policy stability, to give investors confidence during this critical
period. The US solar industry will require private sector investment of $100bn
during the next decade, and any hint that the government’s commitment to clean
energy could waver and investors will run for cover.”

The analysis quoted in this release is from a recently published report by
Bloomberg New Energy Finance entitled “Quantifying the US solar market: system
returns and new build projections”. The full report, which is included in the
company’s Solar Insight Service, combines policy analysis and economic
modeling to identify investment opportunities across states, and models
renewable electricity credit markets and technology adoption rates to forecast
the size the future US solar market.


Bloomberg New Energy Finance (BNEF) is the world’s leading independent
provider of news, data, research and analysis to decision‐makers in renewable
energy, energy smart technologies, carbon markets, carbon capture and storage,
and nuclear power. Bloomberg New Energy Finance has staff of more than 180,
based in London, Washington D.C., New York, Tokyo, Beijing, New Delhi,
Singapore, Hong Kong, Sydney, Cape Town, São Paulo and Zurich.

Bloomberg New Energy Finance serves leading investors, corporates and
governments around the world. Its Insight Services provide deep market
analysis on wind, solar, bioenergy, geothermal, carbon capture and storage,
smart grid, energy efficiency, and nuclear power. The group also offers
Insight Services for each of the major emerging carbon markets: European,
Global Kyoto, Australia, and the U.S., where it covers the planned regional
markets as well as potential federal initiatives and the voluntary carbon
market. Bloomberg New Energy Finance’s Industry Intelligence Service provides
access to the world’s most reliable and comprehensive database of investors
and investments in clean energy and carbon. The News and Briefing Service is
the leading global news service focusing on clean energy investment. The group
also undertakes applied research on behalf of clients and runs senior‐level
networking events.

New Energy Finance Limited was acquired by Bloomberg L.P. in December 2009,
and its services and products are now owned and distributed by Bloomberg
Finance L.P., except that Bloomberg L.P. and its subsidiaries (BLP) distribute
these products in Argentina, Bermuda, China, India, Japan, and Korea. For more
information on Bloomberg New Energy Finance:


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Bloomberg New Energy Finance
Sarah Feinberg, +1 202-654-4360