What will the Solar Industry in California Look Like in 2014?

California continues to lead the country in solar and renewable energy installations. A recent study in Solar Buzz reports that the U.S. solar market will grow tenfold by 2014. Considering the state of the economy and that big corporations are feeling threatned by small solar companies croping up, that may be a streach. If subsidies applied to the oil industry were redirected to solar and renewable energy, we might see that happen.

In 2009, the U.S. solar market grew 36 percent, according to the United States PV Market 2010. However, this didn’t come close to the 62 percent growth experienced during 2008. This was due in part to 2009 economic recovery, as well as transformations in the solar industry, including changing roles of utility companies, lower cost solar modules from Asia, and new direct-to-market approaches.

California continues to lead U.S. in solar developments, with 53 percent of U.S. solar grid tied installations. But even with California’s golden glow, the U.S. is still third in the global solar market, behind Germany and Italy. In a press teleconference yesterday, Nancy Pfund, Managing Partner for DBL Investors, said that the U.S. solar market will “need to be more patient” before California shines at full brilliance.

“California has the fastest growing distributed solar market in the world. The scale of our effort is going to dwarf other parts of the world,” Pfund said.

Within the next five years, Solar Buzz predicts in a printing, that the market will grow to between 4.5-5.5 GW (about ten times the size of the 2009 market). This adds up to an average annual solar growth rate of 30 percent. Motivations will be utilties positioning themselves more aggresively to meet the obligations of the Renewable Portfolio Standard, the development of new state markets, and the return of the corporate segment.

At least for 2010, many utilities are motivated by the Treasury Grant Program. This program, initiated in 2009, allows the commercial solar tax credit to be taken as a cash grant for a limited time. However, this program ends at the end of 2011, so many in the solar industry wish to meet the start-construction deadline by year end.