Solar Power Growing but Still Too Small
The Solar Energy Industries Association (SEIA) released its annual report for 2012. The data show that the U.S. solar market grew 76% last year. Even with that level of expansion, the energy source is extremely tiny by the standards of most others. And growth of other energy sources like shale and natural gas could quickly stunt solar's future.
In the report the association's executives report:
2012 was a historic and busy year for the U.S. solar market. Photovoltaic (PV) installations grew 76% over 2011, to total 3,313 megawatts (MW) in 2012, with an estimated market value of $11.5 billion. Each market segment (residential, non-residential, and utility) showed growth over 2011, while the overall markets in most U.S. states expanded as well. Installed prices for PV systems fell 27% during 2012 and at least 13% in each market segment. Nearly 83,000 homes installed solar PV, and cumulative PV installations in the U.S. surpassed 300,000.
The U.S. has more than 100 million homes and housing units. The solar PV installations are hardly a measurable fraction of that.
The reports also states:
Even with the cost of solar falling for consumers, the market size of the U.S. solar industry grew 34 percent from $8.6 billion in 2011 to $11.5 billion in 2012 - not counting billions of dollars in other economic benefits across states and communities. As of the end of 2012, there were 7,221 MW of PV and 546 MW of concentrating solar power (CSP) online in the U.S. - enough to power 1.2 million homes.
But solar is not in 1.2 million homes. And $11.5 billion is about a quarter of the profits - not revenue, but profits - of Exxon Mobil Corp. (NYSE: XOM) last year.
Solar continues to face significant hurdles. Among them are inertia. Many homes and businesses do not want to bother changing energy sources, even with the loose promise of savings in doing so. Energy sources from gas to heating oil also promise savings if only the installed base would upgrade to the latest technology. Solar's message gets lost in the noise about other energy sources
The image of solar also has to battle the tons of news reports about the future of shale oil and gas, and what these will do to U.S. energy needs. Some experts believe that America will be energy independent within two decades. An implied side effect of that is that the prices for traditional fossil fuel energy will plunge.
The footprint solar energy has in the U.S. may continue to increase, but that is because of the law of small numbers. Tiny dollar amounts can grow by high percentages. That does not mean the total market even scratches the surface of America's energy needs.
Filed under: 24/7 Wall St. Wire, Alternative Energy Tagged: featured, XOM