The U.S.solarenergy industry continued to be one of the fastest-growing sectors of the economy in Q1 2011 according to the U.S. Solar Market Insight: Q1 2011 report released today by the Solar Energy Industries Association® (SEIA®) and GTM Research.

In total, cumulative grid-connected solar electric installations have reached more than 2.85 gigawatts (GW), enough to power nearly 600,000 U.S. homes.

In the first quarter of 2011, the United States installed 252 megawatts (MW) of grid-connected photovoltaics (PV) or 66 percent year-over-year growth over Q1 2010 installations. Two major factors drove this growth: falling solar energy equipment costs and a rush to take advantage of the Section 1603 Treasury program that was expected to expire in 2010 (the program was eventually extended through the end of 2011).

All three PV market sectors (residential, commercial and utility) continued to grow, with commercial installations showing the strongest gains.

“On the whole, the U.S. is currently the PV industry’s most attractive and stable growth market,” said Shayle Kann, Managing Director of Solar at GTM Research. “This is reflected in our report’s quarterly market data and in the comments from global suppliers, distributors, and developers, all of whom see the U.S. positioned to nearly double its global market share in 2011 and support a greater diversity of installation types than has been previously seen in any leading demand center.”

Geographically, the U.S. market was concentrated in a few key states. In Q1 2010, the top seven states comprised 82 percent of total installations, but that figure grew to 88 percent in Q1 2011, implying that established, leading markets gained an even larger share. The pace of installations grew more than 50 percent in 11 of the 21 states analyzed in the report.

Price declines were also an important factor in the Q1 2011 solar expansion, as technology costs fell and the industry matured further, capitalizing on greater economies of scale and streamlined project development and installation.

Domestic PV module production in Q1 2011 amounted to 348 MW, a 31 percent increase over Q1 2010.

“With analysts predicting that the U.S. will become the world’s largest solar market within the next few years, manufacturers are increasingly looking to the U.S. to site their facilities,” said Tom Kimbis, SEIA Vice-President of Strategy and External Affairs. “They are finding significant value in manufacturing close to their expected source of demand. This strong demand continues to make solar one of the fastest growing industries in the United States and a source of thousands of good jobs from manufacturing and installation to engineering and sales” 

Along with analysis of the U.S. PV market, the quarterly U.S. Solar Market Insight provides visibility into the concentrating solar power (CSP) market. No CSP projects came online during Q1 2011, but a total of 1.1 GW of CSP and concentrating photovoltaic (CPV) projects are under construction. The concentrating solar industry continued its momentum, with several projects receiving government loan guarantees during the quarter.

Click here to learn more about the U.S. Solar Market Insight: Q1 2011 report and to download a free copy of the report's Executive Summary.