The US residential photovoltaic (PV) systems market is consistently growing. In Q1 2014, residential PV installations exceeded commercial installations for the first time in recent history. Installations have gone up by 38% in the last quarter, when compared to Q1 2013 and are expected to grow by 61% at the end of this year. The national average price of residential solar power is also reflecting the positive trend; the price was down by 7% to $4.56 from $4.91/W
Reasons for the growth
More than the technology, the business models of the players seem to have fueled the growth of the residential market. Huge upfront investments required to install a rooftop PV panel had created a big barrier for customers. The third party ownership (TPO) model, which all the major players in the market now follow, removed this barrier by letting customers install the panels on their rooftops by paying a small monthly installment amount instead of the huge initial cost. The third part ownership model allowed consumers to sign a power purchase agreement, under which the solar company actually owns the panels though they are installed on consumers’ rooftops free of cost. These companies offer lower rates than local utility companies.
Before 2010, the number of players in the TPO market was small. However, several new entrants followed this model after the initial success of some companies. SolarCity clearly leads the market with a market share of around 32%, while Vivint has performed well through the year in Massachusetts. In New Jersey, Roof Diagnostics and Trinity Solar outperformed all the other players.
Due to market conditions the price of PV module increased by around 5.8% by the end of Q4 2013. However, prices are expected to come down this year. Prices are expected to fall by 9.7% by Q4 2014. The next year will see a further reduction of around 25% in prices.
Power generation using solar photovoltaic panels is now one of the most important sources of renewable energy. The rise in the use of rooftop PV systems is clearly a step in the direction of clean energy.