I like the growth rate in solar installations in California. If it continues for another 5 years residential solar will have come of age.
Let’s look at the numbers (based on my analysis of data supplied by the California Solar Initiative):
| year | 2007 | 2008 | 2009 | 2010 ytd |
|---|---|---|---|---|
| installs in Calif. | 2,323 | 8,098 | 11,301 | 12,559 |
| kW | 11,704 | 53,328 | 61,906 | 63,095 |
| cumulative kW | 11,704 | 65,033 | 126,938 | 190,033 |
| annual growth MW (%) | 356% | 16% | 36% (est) |
If the industry is able to continue with a 35% growth rate, 5 years from now we’ll be seeing about 375 MW being installed per year with a market value of around $3 billion !
What are the conditions needed to support that level of activity? I see five main requirements:
- continuation of federal and state incentives which drive down the cost of installs significantly (California incentives will grow to around $600 million per year in California by 2015, this is real money) ,
- continuation of current tariff practices that allow offsetting average rates, net metering, and exemption from standby charges,
- continued high energy costs allocated to the residential sector in the California IOUs
- no run up, and potential drops, in the cost of solar, and
- no major increases in financing costs for solar systems.
Right now its not too hard to believe these conditions will continue for a five year period. But at some point the penetration of solar will become large enough to pressure both budgets (via tax credit costs and direct incentive payments) and utility tariffs which must collect transmission and distribution cost.
So, with California being one of the promising markets for solar developers, which manufacturers are enjoying success in the market? In my next post I’ll answer that question.