First Solar, Inc. (MM) (NASDAQ:FSLR)
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5 Years : From May 2012 to May 2017
U.S. solar-panel installations this year topped previous years, due primarily to large solar farms, but the outlook for U.S. solar-panel makers and continued growth for the domestic market is uncertain, according to a study released Wednesday.
More than 1,000 megawatts of solar panels were installed in the U.S. through the third quarter, the most during any year to date, according to the study, by GTM Research and the Solar Energy Industries Association. The study predicted that U.S. developers would install 1,700 megawatts, or 1.7 gigawatts, of solar panels this year, up 89% over last year.
Companies installed nearly 450 megawatts of solar panels in the third quarter, 140% more than the same period a year ago, as the industry has raced to put panels in the ground and on rooftops ahead of the expiration of a key government incentive at the end of this year. Almost half of those installations were for large utility-scale solar farms, according to the report.
Weak solar-power demand in Europe, rising demand in the U.S. and an oversupply of solar panels have led manufacturers to target the U.S. for market expansion. As a result, U.S. solar-panel makers have lost market share to Chinese rivals, the study said.
In California, where utility customers pay for subsidies to support residential and commercial solar-power development, Chinese solar-panel makers now dominate the market. Chinese manufacturers supplied 40% of the state's residential and commercial solar market in the third quarter, up from 29% at the beginning of the year, according to California state data published in the report. U.S. solar-panel makers' share of that market went from 37% in the first quarter to 29% in the third quarter, according to GTM Research and SEIA.
With the exception of First Solar Inc. (FSLR), based in Tempe, Ariz., Chinese solar-panel manufacturers now dominate the U.S. utility-scale solar market, the report said.
"Domestic suppliers, whose business has hitherto hinged on success in the U.S. market, are therefore expected to face challenging times," the report concluded.
The report notes that a potential "wild card" for U.S. manufacturers is a trade petition that SolarWorld AG's (SWV.XE) U.S. unit filed with the federal government that accuses Chinese rivals of dumping their products below the cost of production.
SolarWorld and six other firms have asked the Department of Commerce to impose anti-dumping and countervailing duties on solar cells and solar panels imported from China to protect domestic manufacturers.
If the federal government imposes new duties on Chinese solar imports, it would make domestic suppliers more price competitive and "could result in a material increase in domestic market share for U.S.-manufactured modules in 2012 and beyond," the study concludes.
Oregon, where SolarWorld's manufacturing facilities are located, and Ohio, where First Solar operates a factory, produced roughly half of the 316 megawatts of U.S.-made solar panels in the third quarter, according to the study.
The U.S. solar industry in 2012 and beyond are uncertain due to the expiration of the Section 1603 Treasury Program, the report said. The government program offers eligible solar developers cash equal to 30% of the cost of a project, in place of a tax credit.
The program has awarded more than 3,600 grants totaling $1.5 billion for more than 22,000 individual solar projects in 47 states, as of November, according to SEIA. Without the program, solar developers could find it more difficult to finance new projects, the report said.
-By Cassandra Sweet, Dow Jones Newswires; 415-269-4446; firstname.lastname@example.org