Driven by strong demand in the United States, the North American solar PV market is set to grow by over 100% this year, according to a report released by the analysis firm NPD SolarBuzz.
Due to the success of the Treasury Grant Program, the U.S. will account for 85% of installations in the North American market. American installations could potentially reach 1.9 GW by the end of December — again doubling year-over-year installations.
Much of the activity in the last two quarters has been spurred by companies rushing to qualify for the Grant Program, an incentive through the Treasury that provides a cash payment worth 30% of a project’s cost. The program, which was created as part of the Stimulus package and is set to expire at the end of December, has been a resounding success.
The solar industry still has an investment tax credit in place through 2016. However, with many financiers unable to take full advantage of tax credits, some analysts expect the market to shrink. In an effort to keep the momentum strong, a coalition of 763 companies and organizations in the solar industry issued a letter to Congress yesterday urging political leaders not to let this crucial program expire. According to the coalition, available finance would be more than 50% less than it is today under the grant:
The 1603 Treasury Program has been a resounding success. Since its enactment, the program has leveraged over $22.8 billion in private sector investment to support over 22,000 projects utilizing a wide range of energy technologies in all 50 states. This has resulted in thousands of new American jobs.
The 1603 Treasury Program is an efficient finance mechanism that allows taxpayers and small businesses to maximize the return and value of existing energy tax incentives, and is technology neutral so it encourages the development of a wide variety of domestic energy technologies. Lastly, there remains a need for the 1603 Treasury Program. The tax equity market modestly improved in 2010, but still has not recovered to pre-recession activity. A July 2011 survey of the major tax equity investors by the U.S. Partnership for Renewable Energy Finance estimates expiration of the program would shrink the total financing available for energy projects by 52 percent in 2012. This would stifle job creation and severely restrict the market’s ability to leverage private sector capital to finance new domestic energy projects.
According to a recent report from EuPD Researched and commissioned by the Solar Energy Industries Association, an extension of the grant program could create as many as 37,000 direct and indirect jobs, while supporting 2 GW of additional solar installations through 2016.