New U.S. residential PV installations will pass one gigawatt for the first time in 2014, according to GTM Research.
The research firm has pinpointed four trends to watch in the U.S. residential solar market for the rest of 2014.
Here's what you need to know.
1. Consolidation exposes solar market to risk
Over 90% of residential solar installations were built in ten states in 2013. California, Hawaii, Arizona, and New Jersey were the top four states for the third year and California increased its market share to 56%. California leads the U.S., with over 234,000 net metered residential solar systems, while Minnesota is last, with less than 500. All these factors represent a consolidation that exposes the solar market to risk from a very few policy shifts.
2. Solar being built without state subsidies
Because decreased hardware, financing, and customer acquisition costs have driven the average solar installation cost down 28%, California solar installations in IOU territories built without state incentives went from 17% in 2013 to 58% in Q1 2014, showing that solar can be built largely without state supports, which is now also being seen in the Arizona and Nevada markets.
With four states having an approved or pending monthly fee added to net metering, and three states having rejected fees, the solar industry, utilities, and state regulators and policymakers across the country are studying fees, value-of-solar tariffs, increased net metering caps, and a reduction from the retail rate to a wholesale avoided cost rate as new ways to grow solar.
3. Battles over net metering to continue
Challenges and changes to net metering continue across the U.S. while new forms of financing are opening up and making direct solar ownership more affordable.
4. Third-party owned solar is peaking
Third-party owned solar will peak in 2014, as demonstrated by the fact that it has already begun to fall off in Arizona and Massachusetts. Increased availability of loans from national and regional banks and more PACE program funding are making direct ownership of solar more accessible.
