U.S. Solar Capacity Jumps 66% in First Quarter on Incentives, Low Prices

The amount of solar energy capacity installed in the U.S. increased 66 percent in the first quarter as panel prices fell and developers took advantage of expiring government incentives, a trade group said.

Developers installed 252 megawatts of photovoltaic power systems in the first quarter, compared with 152 megawatts a year earlier, according to a report released today by the Washington- based Solar Energy Industries Association and GTM Research.

“Strong demand continues to make solar one of the fastest- growing industries in the United States,” Rhone Resch, SEIA’s president, said in a statement.

Commercial and government projects accounted for 59 percent of the installations, compared with 44 percent a year earlier. Residential projects were 28 percent and the remaining 13 percent came from utility-scale plants.

The cost of installing solar power is falling, driven by lower costs for components, greater economies of scale and streamlined development and installation, the report said. Prices of solar panels in the first quarter fell about 7 percent from a year earlier.

First-quarter installation volume also increased after developers rushed to break ground on projects before the end of 2010 when a U.S. Treasury grant incentive program was set to expire. That program, which reimburses 30 percent of the costs of building solar systems, was extended in December until the end of 2011.

Top Solar Markets

New Jersey was the strongest market for solar, with 42 megawatts of new capacity installed, up 49 percent. The state has a total of 330 megawatts in operation. California is the largest market with 1.1 gigawatts. Installed capacity in the top seven states accounted for 88 percent of all new capacity in the quarter, up from 82 percent.

SEIA estimates that the U.S. solar energy industry now employs about about 100,000 people.

Growth is expected to accelerate during the year. “First quarter in the U.S. is always low,” said Shayle Kann, managing director of solar research at Boston-based GTM Research, which conducted the study. “First quarter 2010’s number was only 17 percent of the total annual number.”

A total of 878 megawatts of photovoltaic systems and 78 megawatts of solar thermal power projects were installed in 2010, according a report issued by SEIA in March. The total value was $6 billion, up 67 percent from 2009.

Installed capacity of residential, commercial and utility- scale plants may increase by as much as 1.8 gigawatts this year, Kann said.

SEIA represents about 1,000 companies involved in the solar energy industry, including installers, manufacturers, developers and financial companies.

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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