US GRID CONNECT PHOTOVOLTAIC (PV) MARKET REPORT 2008:  2007 Market Outcomes;  2008-2012 Scenario Forecast

REPORT INTRODUCTION

The US market is now poised for lift off with some 1.1 gigawatt of PV projects in prospect - the so-called national "PV Order Book".

This unrisked total is some 5 times the size of the 2007 market and includes projects that have been reserved under PV incentive programs together with direct procurement being planned by end users outside PV programs.

The largest US state share of this pipeline is held by California, which now totals 697.8 MW. In customer type terms, the largest demand is from utilities followed by the Corporate and Government segments.

The US market saw strong customer demand in 2007, resulting in growth of 57%. PV systems above 1 megawatt in size accounted for 23% of the market. The corporate and government segments were collectively the largest representing 51% of demand. Orders from Retail outlets drove the corporate segment, accounting for 56% of total demand.

A summary of 148 individual projects with customer names, project size, location and system integrator in these two segments gives visibility to the shape of demand in each segment.

2007/08 Power Purchase Agreement price terms have varied widely with start prices ranging up to 19.5 cents per kilowatt-hour and annual price escalators ranging up to 4.5% per annum.

There were major changes in national market shares of module suppliers in both the residential and non-residential segments during 2007 - there are new market leaders in both segments. There are also prospects for a change in market leadership among residential system integrators during 2008.

The largest downstream PV sales channel in MW volume terms was through small and medium sized system integrators to end-customers, which accounted for 45% of the market. Module supplier volume channels direct to large system integrators, via distributors, through retail, via OEMs and direct to end customer all saw increased volumes in 2007.

Eighteen capital raising initiatives accounted for $454 million of accumulated funding for downstream US PV companies since January 2007. In a rapid ramp in mergers and acquisitions since the beginning of last year, 22 deals went through that will help accelerate the rapid reshaping of the downstream system integrator mix.

2007 was also a big year for Renewable Portfolio Standards' (RPS).

Four states enacted RPS policies and three states passed voluntary RPS Goals in 2007. Three states added solar set-aside requirements to their existing RPS policies, while another replaced its solar set-aside with a DG set-aside. During the first half of 2008, three more states enacted state-wide RPS goals, while another enacted a state-wide RPS policy with a solar carve-out.

RPS-driven PV demand carries a minimum to maximum range of a 523 MW cumulatively by 2012, after taking into account competition from the pipeline of solar thermal electric projects positioned to meet utility needs.

Utilizing the unparalleled access that Solarbuzz has within the PV industry, this insider report is targetted at established major PV companies in the downstream, new entrants and investment analysts focused on the US market and corporate developments.

Further details about: US Grid Connect PV Market Report 2008