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Page added on August 22, 2013
2/3rds of Global Solar PV Has Been Installed in the Last 2.5 Years
If you want to understand why people so often compare deployment trends in solar photovoltaics (PV) to Moore’s law in computing, consider this statistic: two-thirds of all solar PV capacity in place worldwide has been installed since January 2011.
Let’s put that into perspective. It took nearly four decades to install 50 gigawatts of PV capacity worldwide. But in the last 2 1/2 years, the industry jumped from 50 gigawatts of PV capacity to just over 100 gigawatts. At the same time, global module prices have fallen 62 percent since January 2011.
Even more amazingly, the solar industry is on track to install another 100 gigawatts worldwide by 2015 — nearly doubling solar capacity in the next 2 1/2 years.
Those statistics and the chart below, courtesy of GTM Research Senior Analyst MJ Shiao, illustrate the exponential growth in the global PV market.
Source: GTM Research
And as Shiao’s second chart below shows, the U.S. distributed solar market is on pretty much the same growth trajectory. More than two-thirds of America’s distributed PV (everything except for utility-scale projects) has been installed since January 2011. And by 2015, the country’s distributed PV market is expected to jump by more than 200 percent.
Chart: GTM Research/SEIA U.S. Solar Market Insight
There are a few key takeaways from these figures.
First, utilities still dismissing solar as inconsequential or “cute” may soon be in for a rude awakening. According to the Solar Market Insight report from GTM Research and SEIA, the national average for residential system prices fell another 18 percent last year; non-residential prices fell 13.3 percent.
The falling cost and price of installation is starting to open up new markets without incentives. As Shayle Kann, vice president of GTM Research, pointed out recently, roughly 3,000 residential solar systems were installed in California without the use of any state incentives in the first quarter of this year.
“This is emblematic of a sea change in the solar industry, and even more importantly, in the energy industry,” wrote Kann.
But this rapid increase in installations won’t create challenges for just utilities — it will also create challenges for the solar industry itself. Since the solar market is still at the beginning of a steep growth curve, it’s hard to say whether the business models and technologies we know today are going to be successful in the future.
This will likely mean more bankruptcies and more consolidation. It will also test the reliability of products operating in the field.
Because two-thirds of PV capacity in the field today was only installed in the last couple of years, a majority of the products are still very new. Solar is a multi-decade investment, and there is uncertainty around how new hardware will perform over the long term, explained Shiao.
“We’re really at the beginning stages of understanding PV in terms of products in the field, viable business models, and effects on the grid, especially when you consider that PV is being sold many times as a twenty-year asset. Now is the time to look deeper into issues surrounding product reliability, market sustainability and O&M business models.”
The boom in distributed solar is underway. And we’ve only just begun to understand the implications.
12 Comments on "2/3rds of Global Solar PV Has Been Installed in the Last 2.5 Years"
GregT on Thu, 22nd Aug 2013 1:26 am
” roughly 3,000 residential solar systems were installed in California without the use of any state incentives in the first quarter of this year.”
Considering the fact that there are almost 40 million people in California, this is in reality, very discouraging news for the solar industry.
” Solar is a multi-decade investment, and there is uncertainty around how new hardware will perform over the long term, explained Shiao.”
Exactly why it hasn’t taken off, most people simply do not see an advantage to investing in a technology that takes decades to pay itself off. Especially in tough economic times, when most are living paycheck to paycheck already.
BillT on Thu, 22nd Aug 2013 1:48 am
Why put solar on a house you may not own in 2 years? Few Americans stay in their homes more than 5 years before moving on or trading up. The new ‘in’ will be trading down or renting. A 20+ year investment is not going to be attractive to most people, as you said, Greg, unless they become a positive selling point raising the value of the home.
dashster on Thu, 22nd Aug 2013 1:56 am
“Few Americans stay in their homes more than 5 years before moving on or trading up.”
Not true. Over 50% are still in their home after 14 years:
http://www.nahb.org/generic.aspx?sectionID=734&genericContentID=110770&channelID=311
dashster on Thu, 22nd Aug 2013 2:03 am
“Considering the fact that there are almost 40 million people in California, this is in reality, very discouraging news for the solar industry.”
What I consider the really really discouraging news is not the 3,000 installations, but the close to 40 million people in California. And they are not satisfied by that. There are looking to continue climbing to 50 million and beyond. Future California droughts should be interesting.
Norm on Thu, 22nd Aug 2013 6:32 am
Lotta worry when they keep quoting ‘installed capacity’. yah what about night time, and cloudy days, and rainy days, and 1 bird poop on the panel interrupts the whole circuit, etc etc. how about they quote in probable typical realistic output presuming 24 hr averaging. Naaah. That wouldn’t fit today’s propaganda needs.
BillT on Thu, 22nd Aug 2013 1:55 pm
Norm, those are recent statistics, not the normal spread over the last 50+ years. And even so, it is an average of about 10 years before they move … or less than half of the payback of any ‘alternate’ system. They get to pay the up front costs and then lose the ‘free’ years at the end. About like new car buyers who trade every 3-5 years. They get rid of it just when it is cheaper to drive. (After the last payment.)
And, how many today can be sure they will be owning a home in 5 years? Few … unless they pay cash and have money stashed for taxes over their life time.
mike on Thu, 22nd Aug 2013 3:27 pm
Catabolic collapse in action right there folks.
collapse event -> Action to negate event -> temporary Stability -> collapse event -> Action to negate event -> temoprary Stability…etc etc etc
Chris on Thu, 22nd Aug 2013 4:41 pm
The key to the PV market is being in the right market at the right time.
There is undoubtably a shift in the market towards global players making big in roads in developing countries. Those that lead the pack, enabling world development have seen a rocky road – just read a few articles on our blog to see some of the history in UK solar.
http://www.allecoenergy.com
For installers worldwide, success comes from taking a longer vision, and making the right preparations to be sure that you can deliver on that vision.
energyskeptic on Thu, 22nd Aug 2013 7:31 pm
Solar PV is dead in the water — “Spain’s Photovoltaic Revolution. The Energy Return on Investment”, by Pedro Prieto and Charles A.S. Hall reveals the EROI of solar PV is too low at 2.45 (you need at least EROI of 12 or 13 to keep civilization humming along) and no improvement can every make that EROI rise more than 33% above 2.45, because so much of solar PV is everything else besides the solar panels themselves. I’ve written a book review at energyskeptic called “Tilting at Windmills, Spain’s disastrous attempt to replace fossil fuels with Solar Photovoltaics”. This book should have put solar PV in the graveyard, I don’t understand why there’s hardly a peep about this very important book. Have the techno-optimists taken over?
ezrydermike on Thu, 22nd Aug 2013 8:18 pm
perhaps not such disappointing at all. That’s 3000 systems in the 1st quarter w/o state incentives. turns out that’s about 18% of the total installs. Also, how many residences do the 40 mill live in?
Also, even though you may rent, building owners may still install solar. That’s starting to happen in LA as the DWP has started a feed in tariff program and some of first installs were on apt buildings
BillT on Fri, 23rd Aug 2013 12:57 am
Solar is still good for ‘off the grid’ homes, but will never replace coal/NG/nuclear power plants for large areas/cities. Most of the world is not suited for the needed quantities of solar. Lack of sun in most cases. And what about the days it snows 12″ and then turns to ice, blocking out the sun until they are carefully uncovered by hand? Or dust and pollutants? Or the days/weeks of cloud cover? Then there are those located near trees and falling leaves to be cleaned from their surfaces, etc.
Wind requires huge investments and frequent maintenance over roads kept usable by oil, not to mention security from mother nature’s whims. (Hurricanes, tsunamis, tornadoes, etc.)
Every ‘alternate’ has huge negatives to overcome and I think that most will never be overcome because there is no answer.
Harquebus on Fri, 23rd Aug 2013 1:05 am
Austerity is about to change things.