(Solar energy story updated for solar sector trading, SunPower, Canadian Solar news)
NEW YORK (
) -- These days, numerous predictions are being floated about the growth potential of the U.S. solar market, alongside China, as solar demand drivers in 2010.
It's Earth Day on Thursday, and so, a fitting time to take a look at the recent performance of the U.S. solar industry.
It's no surprise that the focus is on new geographies as the German solar market matures -- though with the
more than 1.4 GW of solar installed in Germany in December, there is no market, at least in the short-term, that can rival Germany.
New data was released detailing the growth of the U.S. solar market in 2009 on last week.
Here are some of the highlights from a report released by the
Solar Energy Industry Association
, whose president, Rhone Resch, could also be caught on
on Wednesday trying to defend the industry against charges that solar technology is still too expensive.
>>SOLAR CAPACITY ADDED IN 2009:
Total photovoltaic solar capacity in the U.S. reached 2 gigawatts in 2009. The rate of growth for PV solar was 37% over 2008 levels, up from 351 megawatts to 481 MW in 2009.
Grid-linked capacity growth fell steeply in 2009, from an 84% growth rate in 2008 down to 38% growth in 2009.
The much larger U.S. market of thermal solar power actually took a step backwards in 2009 as construction spending lagged. Thermal solar shipments had reached 928 MW in 2008, but fell to 865 MW in 2009, which was also slightly below the 2007 level of thermal solar installations.
The total solar project pipeline for residential and commercial rooftop solar in the U.S. now stands at 6 GW, according to the SEIA.
All the big solar players are positioning themselves for this growth, both U.S.-based and China-based solar companies, from
The big driver of the recent rally in solar stocks has been the improvements in the demand forecast and the big numbers out of Germany. Just take a look at where First Solar's stock price has gone since its doldrums days earlier this year, hovering near $100 per share.
The solar rally finally ran into resistance this week. There could be some of the short-term profit taking typical in the volatile sector at play ahead of earnings.
didn't help matters any when it said on Wednesday that foreign exchange losses in the first quarter would well exceed expectations, spooking solar investors into thinking that more forex losses could be on the horizon.
SunPower continues to be under pressure and has not been able to get back above the $20 mark ever since its fourth quarter earnings led to a share decline. On Wednesday,
Auriga Securities initiated coverage of SunPower at a sell, and with a price target of $15.
Trina and Suntech seemed poised to continue their attempt at solar world domination, after having received a letter of intent from China's biggest development bank for loans equaling $11.7 billion dollars on Wednesday.
Without China's development banks about to bankroll the entire U.S. solar sector, though, just how these solar companies capitalize on U.S. specific opportunities is as much about the financing mechanisms available as it is about the potential demand.
>>SOLAR FINANCING TRENDS:
In 2009, venture capitalists invested more in solar technology than any other clean tech sector, with $1.4 billion flowing from the venture sector to solar investments.
With the most
bullish demand forecasts for the global solar market reaching as high as 12.7 GW for 2010, there have been concerns about just where all the financing will come from.
Most of the recent solar financing in the U.S. has been reliant on the financial assistance of a Treasury Department investment tax credit. There are concerns about solar financing in the U.S. drying up if a current cash grant is not extended beyond the end of 2010, when it is scheduled to expire. The 6 GW of projects in the pipeline is highly dependent on government support.
Through February 2010, 46 MW of solar power had been installed using the Treasury tax credit stimulus, according to the new data report from the SEIA.
The 46 MW of solar installed under the auspices of the Treasury program included 169 photovoltaic projects and Treasury cash grants of $81 million.
Forty six megawatts might not seem like much, but it also shows that late start solar got off to in taking advantage of the Treasury cash grant program, something that the SEIA noted in its report. It remains unsettling that just as solar is getting its hands around the cash grant financing program, Congress could pull the plug on it.
How important has the Treasury program been to solar in terms of providing financing while the tax equity investor market remains in the doldrums?
While larger wind projects received a lion's share of the dollars from the Treasury -- 88% versus only 3% for solar -- when ranked by number of projects receiving cash grants, solar projects equaled 72%.
Only 19% of the projects were wind energy.
One thing is clear, with 72% of clean energy projects relying on Treasury cash grants, the fears that solar financing could dry up if the Treasury program is not extended seem to be well-founded.
The issue of job growth tied to alternative energy continues to be a contentious political issue in the U.S.
Data from Navigant Consulting in the SEIA report makes it pretty clear what the manufacturing trends are in solar. Interestingly, the data only includes the U.S., Japan and Europe as specific manufacturing markets. The rest is categorized as "the rest of the world." You can translate that into plain manufacturing language as "China," or at least "Asia."
The "rest of the world" category in the SEIA report supplied more than half of the global photovoltaic module supply in 2009. The percentage of U.S.-manufactured module supply was essentially flat in 2009.
The solar industry made sure to line up its job growth data as support in the ongoing political fight, too, while companies like
move more manufacturing overseas, and former U.S. solar manufacturers like
shut down U.S. solar plants.
The year-end data showed that 10,000 new jobs were created by the U.S. solar industry in 2009, according to the SEIA, for a total solar job market size of 46,000. The solar industry's trade group is forecasting growth in 2010 to 60,000 jobs.
On the other hand, the rate of growth in U.S.-based solar jobs, year over year, has not changed significantly since 2006. And keep in mind, much of the political grand-standing revolves around manufacturing jobs, and the SEIA data shows that approximately half the jobs being created by the solar industry are categorized as "indirect" jobs.
There was a positive indicator of the solar industry sticking behind job growth in the U.S. on Thursday. SunPower announced that it was partnering with Silicon Valley-based Flextronics to have Flextronics manufacture 75 megawatts of solar panels annually. The deal is expected to create 100 jobs annually, SunPower said. However, the deal fell short of earlier reports that SunPower was going to create its first manufacturing plant in the U.S.
German solar giant Q-Cells also partnered with Flextronics in March to manufacturer up to 200 MW of solar modules annually, though at Flextronic's Malaysian plant.
>>U.S. STATES TAKING THE LEAD:
No state can touch California in terms of the size of its solar market. California was No. 1 among U.S. states in solar capacity installed in 2010, and total capacity. California added 220 MW in 2010, and is just above the 1 GW mark in total solar capacity.
California also recently approved a market trading system for renewable energy credits, the type of market-based approach that has allowed the solar industry in New Jersey to withstand pressure from looming state budget cuts.
The biggest drop-off in 2009 came from the state of Nevada. While Nevada remains No. 3 on the list of total solar capacity with 100 MW, the state did not even rank among the top 10 states installing new capacity in 2009.
New Jersey, No. 2 behind California in total capacity at 128 MW, was also No. 2 in 2009, installing 57 MW of solar.
Florida jumped into the No. 3 spot with 36 MW of solar installed in 2009 -- and that's versus a total capacity of 39 MW.
There are only 3 states with at least 100 MW of installed solar: California, New Jersey and Nevada. The fourth-biggest solar market at the end of 2009 was Colorado, with 59 MW installed. In tenth place was Massachusetts, with 18 MW installed.
The rest of the U.S.? Among the 40 states not in the solar top 10, a total of 78 MW of solar had been installed through the end of 2009.
After all the data is taken into account, solar energy continues to represent less than 1% of energy capacity in the U.S. That's room to grow, if nothing else.
-- Reported by Eric Rosenbaum in New York.
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