IREC releases 2008 Solar Market Trends Report

IREC has just released its annual report, U.S. Solar Market Trends 2008. The report, authored by Larry Sherwood, provides public data on U.S. solar installations by technology, state, and market sector. Both PV and solar thermal installations grew rapidly in 2008. This work was funded by the U.S. Department of Energy through the Solar Energy Technologies Program.

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Annual U.S. PV installed capacity grew by 63% in 2008 compared with installations in 2007 to 335 MWDC (including both grid-connected and off-grid markets), bringing the cumulative installed capacity to 792 MWDC. Although PV installation growth had been steady and impressive for many years, the annual growth rate doubled when the federal Investment Tax Credit (ITC) increased in 2006.

“By 2008, the capacity of PV installed each year was triple the annual amount installed in 2005,” said Sherwood. “More than 33,500 sites installed PV in 2008, with 62% of these sites and 87% of the installed capacity connected to the grid. Most of these installations are mounted on buildings, but some are ground-mounted installations.”

Early indicators point to market growth in 2009, though likely at a slower rate than during the last several years. The market should return to high growth rates in 2010. The long-term extension of the federal Investment Tax Credit (ITC), new rules that allow utilities to take advantage of the ITC, and the establishment of a grant program alternative to the commercial ITC will all help solar installations.

Since these policies were just recently enacted (in October 2008 and February 2009 respectively), the market will take some time to respond to these new policies. Companies have announced plans for many large solar electric projects, including solar thermal electric projects, utility-owned projects, and third-party owned projects. A few of these projects will be completed in 2009, but most will come on-line in 2010 and beyond.

Many states are offering incentives, and system installation growth more than doubled in Arizona, Connecticut, Hawaii, Maryland, Massachusetts, New Mexico, North Carolina, Oregon, Pennsylvania and Wisconsin. Each of these states has one or more significant financial incentive and/or a renewable portfolio standard (RPS) program with a mandate for solar installations.

“For all solar technologies,” said Sherwood, “the United States is only a small part of a robust world solar market. Product availability and pricing generally reflect this status. Germany and Spain are the top markets for PV and China is the largest market for solar thermal collectors. However, this report does not analyze markets outside the United States.”

Solar hot water installations have boomed since the federal investment tax credit (ITC) was extended to residential installations in 2006. In the continental 48 states, the annual installed capacity has more than quintupled since 2005 and residential sector installations dominate the market. Hawaii continues to be the largest market for solar hot water.

For more information about this report, contact Larry Sherwood.

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