By Ehren Goossens, Bloomberg
The amount of new solar energy capacity in the U.S. doubled last year and may double again in 2011 because of government incentives, stronger demand and falling prices, a trade group said.

The total capacity of photovoltaic and solar thermal power systems that were installed last year reached 956 megawatts, compared with 441 megawatts added in 2009, according to a report released today by the Solar Energy Industries Association.

Installed capacity of residential, commercial and utility- scale plants may increase by as much as 2 gigawatts this year, according to GTM Research, which worked with Washington-based SEIA to produce the report.

'Another doubling of U.S. installations in 2011 is likely, even in the absence of a substantial mid-year price decline,' Shayle Kann, GTM Research's managing director of solar research, said in an interview.

In total, 878 megawatts of photovoltaic systems and 78 megawatts of solar thermal power projects were installed in 2010, according to the report. The cost was $6 billion, up 67 percent from 2009.

The cumulative total of 2.6 gigawatts of installed capacity can power more than 500,000 households, the report said.

Largest Market

First Solar Inc. (FSLR), the world's largest maker of thin-film solar modules, expects the U.S. to be its largest market this year, and has 2,400 megawatts of North American projects in its development pipeline, Alan Bernheimer, a spokesman for the Tempe, Arizona-based company, said in an e-mail.

A U.S. Treasury grant program, which reimburses 30 percent of the costs of installing solar systems, helped drive up the number of projects, the report said. The installed price of photovoltaic systems fell by 10 percent for commercial and 8 percent for residential installations last year.

Other countries are cutting their subsidies for solar systems this year, potentially leading to an oversupply of panels and further price cuts.

'There is a strange effect where the worse things get in Germany and Italy, the more suppliers are going to price more competitively in new markets, like the U.S., ultimately growing the market,' Kann said.

California had 259 megawatts of photovoltaic capacity installed in 2010, more than all other states. New Jersey followed with 137 megawatts, more than doubling from 57 megawatts in 2009 and the highest growth rate.

SEIA represents about 1,000 companies involved in the solar energy industry, including installers, manufacturers, developers, financial companies and others, SEIA's assistant manager of communications Jared Blanton said in an e-mail.

To contact the reporter on this story: Ehren Goossens in New York at

To contact the editor responsible for this story: Reed Landberg at