Analysis of the U.S. Utility-scale Solar Power Market


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The adoption of utility-scale photovoltaic (PV) and concentrating solar power (CSP) plants in the United States is expected to accelerate during the next decade. The presence of high solar irradiance, along with continuous pressure from the government to implement renewable energy technologies, fuels demand for solar projects. As solar energy competes with conventional forms of electricity generation, the potential market for utility-scale solar power plants in the country is on the rise.

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Analysis of the U.S. Utility-scale Solar Power Market

  1. 1. Analysis of the U.S. Utility-scale Solar Power MarketExpiration of the 1603 Program Likely to Affect New System Installations NB86-14 September 2012
  2. 2. Contents Section Slide Numbers Executive Summary 4 Market Overview 9 Total Utility-scale Solar Power Market - External Challenges: Drivers and Restraints 14 Forecasts and Trends 24 Market Share and Competitive Analysis 32 Value Chain Analysis 43 Mega Trends and Industry Convergence Implications 47 Photovoltaic System Segment Breakdown 49 Concentrating Solar Power System Segment Breakdown 64 The Last Word (Conclusions and Implications) 79 Appendix 82NB86-14 3
  3. 3. Executive SummaryNB86-14 4
  4. 4. Executive Summary Utility-scale photovoltaic (PV) plants and concentrating solar power (CSP) plants are expected to accelerate during the next decade in the United States due to the presence of high solar irradiance and the continuous pressure for the implementation of numerous renewable energy generation technologies. Cumulative PV solar installations in the United States reached 1,855 megawatts (MW). The utility-scale segment represented 32.2 percent, or 598 MW, of the annual installations during 2011. No new CSP plant was installed during 2011. However, CSP projects totaling more than 1.4 gigawatts (GW) are under construction. The utility-scale market is projected to grow at a compound annual growth rate (CAGR) of 60.6 percent from 2011 to 2016. Expiration of the 1603 Program for installation reimbursements is likely to affect new system installations, especially during 2013. The PV industry experienced tremendous supply/demand imbalance through the value chain in 2011. Most solar module manufacturers had to reduce prices, decrease margins, and, in some cases, close manufacturing facilities due to overcapacity, increasing competition from Chinese manufacturers, and lower demand. Source: Frost & Sullivan analysis.NB86-14 5
  5. 5. Market OverviewNB86-14 9
  6. 6. Market Overview Definitions Solar energy is a source of power that utilizes energy from the sun. The principal forms of solar energy are heat and light. This research service focuses on solar technology that can be used for electricity generation. The main technologies suited for electricity-generated solar power are PV and CSP. The PV method is the process of converting energy from sunlight into electricity. A PV systems basic unit is the PV cell, made of semiconductor devices in which electrons are released when light strikes the cell, resulting in a flow of a charge. A group of cells arranged in an interconnecting pattern is called a module. CSP systems generate power indirectly using lenses or mirrors to concentrate the energy and convert it into heat, which is channeled through a conventional generator. These plants consist of two parts: one that collects solar energy and converts it to heat, and another that converts the heat energy to electricity. Source: Frost & Sullivan analysis.NB86-14 10
  7. 7. Market Overview Definitions (continued) This research service analyzes the solar power market in the United States for utility-scale applications. The base year for this study is 2011, and the forecast period is 2012-2016. This research service analyzes the market share among solar plant developers. It only considers solar power technologies used for power generation and excludes other applications. Market size is provided in terms of revenue and installed capacity. Revenue figures consider the installation cost of solar plants; installed capacity figures describe the plant nameplate capacity. Solar PV systems can be classified as crystalline silicon, thin film, and concentrator PV, based on the employed technology. CSP systems can be classified, based on the solar energy collection method, into four technologies: Parabolic trough, power towers, dish concentrators, and linear fresnel systems. For this research service, - is defined as projects with more than 1 MW integrated to a utility either by ownership or a power purchase agreement. According to the National Renewable Energy Laboratory, the levelized cost of energy (LCOE) is the cost of generating energy (usually electricity) for a particular system. Source: Frost & Sullivan analysis.NB86-14 11
  8. 8. Market Overview Key Questions This Study Will Answer What is the current status of the solar market? How long will it continue to grow, and at what rate? Who are the main participants in the market? How is the utility-scale solar power market expected to evolve among the different technologies in terms of installed capacity? What are the main drivers and restraints affecting the market? Are solar panel prices expected to continue their decline? What are the main technology trends affecting the market? Source: Frost & Sullivan analysis.NB86-14 12