Booming North American solar industry at a crossroads

The photovoltaic market in North America has boomed in the fourth quarter as installations double from 2010, but some analysts believe it has reached a crossroads over its future.

A report from Solarbuzz says the PV market in North America has grown by 33 percent quarterly, with a 101 percent increase on last year.  This means that 0.8 gigawatts of capacity has been installed in the final quarter of 2011, with a total of 2.2 GW this year.  The US accounted for 84 percent of demand, with Canada responsible for the remaining 16 percent in the continent.

In the US alone, the PV market grew 32 percent from the second quarter of this year, and could account for 1.9 GW for the whole 12 months.  This means that it has doubled in size for the second year running. The Canadian market will increase 35 percent on a quarterly basis and 33 percent year on year.

These increases are attributed to incentives being dished out on either side of the border, with feed in tariffs and low prices helping drive demand.

In the US, tax credits and cash grants have done their bit in convincing the public to invest in solar. The federal government has shelled out $1.4 billion up to the end of Q3 2011.  

Despite analysts stating that PV is set to take significant share from other forms of energy sources as it begins to reach grid parity, there are concerns hanging over the market.

Prices may be plummeting but there are oversupply concerns as well as fears the incentive programmes could be hit like they have been in Europe. There has been an uproar in the UK over the sharp cuts to incentive programmes after it was found that such rapid growth of the market was unsustainable and spiralling out of control. 

In Ontario, where the vast majority of Canadian installations are found, there is already talk of declining FIT rates.

As the Solarbuzz report says, there are low panel prices and other incentive programs are popping up and generating demand, but “policy, regulatory, and corporate risks still exist”.

This can be seen in the divisive feud between the US-based and Chinese firms that is threatening to cause disruption. There has been anger from SolarWorld America about the Chinese government subsidising cheaper panels, leading to unfair competition.  

SolarWorld demanded that President Obama hit the Chinese industry with trade sanctions to levell the playing field as companies struggle to make a crust on dwindling profits.

Chinese panel makers hit back, however, with Wang Guiqing, vice president of the China Chamber of Commerce refuting claims that the industry is unfairly supported.

“The photovoltaic industry based in China has formed a united front to counter the US investigation,” Wang said, according to AFP. “China’s photovoltaic industry has greatly contributed to the development of the global market.”

It is now thought that the some Chinese developers and manuifacturers have started delaying shipments.

Nevertheless, the market in North America is expected to triple in size by 2015.