As NJ Solar Sector Cools, Rest of Country Shows Double-Digit Growth

Tom Johnson | December 12, 2012 | Energy & Environment
Garden State's solar industry still appears to be victim of its own success

The pace of solar installations may be slowing a bit in New Jersey, but in the rest of the nation the third-largest number of systems was installed in the third quarter, guaranteeing a record surpassing last year’s total of 1,885 megawatts of capacity.

So far this year, 1,992 megawatts of capacity were installed across the country, according to the Solar Energy Industries Association, a trade group representing the businesses in the sector.

In the third quarter, 684 megawatts were installed, representing a 44 percent growth over the same period last year, according to a report by GTM Research and the association.

In New Jersey, 31 megawatts of new solar capacity were installed in October, up a bit from the 20 megawatts deployed in September, but well below the 42 megawatts sited in October 2011, according to data from the New Jersey Office of Clean Energy.

Statewide, New Jersey has installed over 950 megawatts of solar capacity, accounting for more than 1 percent of the electricity used by its residents and businesses.

At that juncture, the state’s solar market overheated, fueled by a combination of lucrative state and federal incentives to promote the development of solar-energy systems.

It was successful to a point. New Jersey still ranks behind only California in the number of solar-energy systems, but the sector has cooled off because prices for the electricity owners of the arrays earn have dropped off steeply due to oversupply.

Gov. Chris Christie signed a law seeking to stabilize the sector last summer, by ramping up the amount of solar electricity power suppliers must buy, but it is too early to tell whether the measure will achieve that goal, according to many in the industry.

“While the third quarter of 2012 was remarkable for the U.S. photovoltaic market, it is just the opening act for what we expect to see in the fourth quarter,’’ said Shayle Kann, vice president of GTM. Historically, the fourth quarter has been the strongest for photovoltaic installations in the U.S.

“This quarter’s record residential growth shows the power of innovation in the U.S. solar industry,’’ said Rhone Resch, president and chief executive officer of the solar association. “With costs continuing to come down and new financing options, solar energy is affordable today for more families, businesses, utilities, and the military.’’

According to the report, the average costs of a completed solar-energy system dropped by one-third in the third quarter of 2011, and the average price of a solar panel fell by 58 percent since the beginning of the year.

Commercial installations grew 24 percent in the third quarter, led by notable growth in California and Massachusetts.

“The data coming out of the U.S. Solar Market Insight report mirrors what we are seeing as an owner of commercial rooftop solar projects in the U.S.,’’ said Mike Ward, U.S. president IKEA. The company is hoping to have 90 percent of its facilities power by solar.

Today, the U.S. solar-energy industry employs 119,000 people, mostly at small companies, across all 50 states.