Solar System Installments Surging

Currently a residential solar module is installed every 2.5 minutes in the United States. The frequency of residential solar installations has been increasing dramatically in the last ten years, as shown in the graph below:

Solar Installations in The United States – Source: Greentech Media

In 2001 residential solar installations were completed at a pace of one installation every 578 minutes (~9.30 hours). Since then, the time between solar installations has been cut in half about every two years. This trend can be correlated with the recent growth of the solar industry in the United States, as well as the growth of the global photovoltaic (PV) industry. The main reason for the growth of US residential solar installations in 2014 was a combined $15 billion of investment in the residential solar market industry. In the US, residential solar is the fastest growing sector of the solar industry and has created many innovative new companies, such as SolarCity, Solar Mosaic and Sungevity, that have thrived from business model innovations that create value in the US solar market. Research from Greentech Media indicates that at the current pace of installations the residential solar market in the United States will reach 900,000 total installations and easily amount to over 1 million installations in 2016.

A major contribution to the growth of the global solar industry, including solar growth in the United States, has been the surging PV module production in China.

World PV Module Production - Source: JRC PV Status Report

World PV Module Production – Source: JRC PV Status Report

As seen from the figure above, China has historically been the driver of global solar module production and annual production of PV modules has grown with Chinese output. Its scale of PV module production has allowed China to manufacture solar products at cheaper prices and drive down the global of solar power. The entry of Taiwan into the mass-production of PV modules has also aided the global drop of solar prices. The cumulative benefits from the comprehensive price drops in PV modules and solar energy has immensely facilitated the growth of solar markets across the world. Growth in global solar markets totaled 23% in 2013, even though investments in the solar industry declined by 23% the same year. The expansion of the solar industry in spite of the decline the cumulative decline in investments can be attributed to the lower cost of solar, since a dollar in the 2014 solar industry has more direct impact on installations than a dollar in the 2001 solar industry.

China has historically been the leader of the supply and production side of the solar industry, while the global demand has historically been driven by the European Union. However, an analysis of the 2013 solar markets indicates that the hub of solar demand has shifted towards Asia, as Chinese solar installations in 2013 outpaced European installations. The strength of the Asian solar industry has been driven by China and Japan, the largest and second largest Asian solar market respectively. The figure below cumulatively global solar installations, which clearly shows the growth of installations in China and Japan in recent years.

Cumulative Global Solar Installations - Source

Cumulative Global Solar Installations – Source: JRC PV Status Report

 

Recent trends that both production and installation will continue to enhance Asia’s, particularly China’s, influence on global solar markets. While Asia, Europe and North America will continue to drive the global solar industry in multi-faceted ways, new countries continue to emerge as new markets for solar energy:

  • Chile has recently experienced a boom of utility scale solar installations in the Atacama dessert.
  • Argentina has passed a new energy law requiring that 8% of electricity demand should be generated by renewable energy sources in 2016 and had installed ~20 MW of PV systems by the end of 2013.
  • Brazil, which already has 170 MW of installed solar capacity, recently passed a law to facilitate the installation of off-grid distributed generation systems. Many distributed energy generation systems use PV modules as an energy source.
  • South Africa has experienced a solar industry boom, including bidding for solar facilities and opening of solar productions sites.
  • Various African countries have already passed renewable energy targets and continue to develop legislation to stimulate solar energy growth.