Developments within the US solar farm market have been exploding over the past five years. Demand for construction of utility-scale solar power projects has skyrocketed thanks in large part to substantial government assistance.
As a result, industry revenue is expected to catapult 91.8% per year on average to approximately $6.8 billion over the five years to 2013.
With heavy demand for solar energy, developers have benefited significantly from rising profit margins. In general, solar panel prices have been declining sharply in recent years due to a glut in the market for silicon in light of excess supply of the commodity.
Approximately 274 megawatts of US utility-scale solar farms were likely to be installed in 2010, up 370% over the previous year, and more than double that amount connected to the grid in 2011.
5,600 megawatts of solar farms will be installed by 2015, with more than half of that amount to be built in 2015. If most projects that have been announced succeed and utilities sign more contracts in the near term, demand in 2015 could exceed 3,000 megawatts.
The Solar Investment Tax Credit (ITC) was extended in 2008 to remain in place through 2016. The ITC boosts demand for solar farms by encouraging private investment into solar technologies, giving purchasers a 30% tax credit on the cost of a solar panel.
Additionally, many states have implemented renewable portfolio standards (RPSs), which require a portion of electricity generation to be from a renewable resource, increasing demand for solar generation, to the benefit of solar farm developers.
Large solar energy projects, or solar farms, had already been experiencing a boom when the federal government cleared the way for more to locate on public land.
The Department of the Interior announced in October that it has set aside 285,000 acres of public land in the West for the utility-scale installations. An additional 19 million acres have been identified for potential development in the future.
If fully developed, solar projects on the land could produce as much as 23,700 megawatts (MW) of solar energy. That's enough to power about 7 million American homes.
For more information on the US solar farm market, see the latest research: US Solar Farm Market
Follow us on Twitter @CandMResearch
Companiesandmarkets.com issues news updates and report summaries covering all major industries and sectors. The service provides additional client monitoring and timely alerts to breaking industry and sector news leading the day's business headlines. News articles, written by our staff, contain additional analyst insight, providing value added insight for our readers. News updates and real-time alerts on newly-released market reports are also available from our Facebook page, Twitter feed @CandMResearch and RSS links. We also welcome inquiries from business journalists and the news media.