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7.3 GW was installed, for a total of 25.6 GW. 42 The market was
driven by a race to complete as many projects as possible before
expiration of the federal Investment Tax Credit (ITC), which in late
2015 was extended through 2021. 43 The residential sector saw
the fastest growth, and direct ownership continued to increase
thanks in part to new loan products. 44 The utility-scale sector
remained the largest, with more than 4 GW added and almost
20 GW under development at year’s end. 45 Again, California led
for capacity added (3,266 MW), followed by North Carolina (1,134
MW), with Hawaii well ahead for solar penetration. 46
Solar PV is proving to be an economically competitive option for
meeting US peak power needs, with utility interest going beyond
the demand driven by state-based Renewable Portfolio Standards
(RPS). 47 An estimated 39% of utility capacity added in 2015 was
outside of state RPS mandates. 48 The success of distributed solar
and falling costs has led some US utilities to establish their own
solar programmes – including residential and community projects
– and has led other utilities to fight for revisions or elimination of
supportive policies. 49 Net metering has driven most US customersited
solar PV capacity and has been at the centre of regulatory
disputes in more than 20 states. 50 With extension of the ITC,
the biggest challenges facing solar PV in the United States are
ongoing battles over net metering and rate design. 51
The EU market picked up in 2015 after three years of decline,
but was still far below its 2011 peak (22 GW), restrained by
a shift away from FITs and by general policy uncertainty. 52
(p See Policy Landscape chapter.) About 7.5 GW was added,
bringing the region’s total to almost 95 GW of operating solar
PV capacity, well ahead of all other regions. 53 Three countries
– the United Kingdom (3.7 GW), Germany (1.5 GW) and France
(0.9 GW) – were responsible for more than 75% of the EU’s new
grid-connected capacity. 54 Others adding capacity included the
Netherlands (450 MW) and Italy (300 MW), where the market
was down dramatically despite the low generating costs and
supportive policies. 55 Spain, which drove the global market in
2008, has virtually disappeared from the solar PV picture due to
retroactive policy changes and a new tax on self-consumption. 56
The UK rush was in anticipation of subsidy expirations and FIT
cuts, and brought total capacity to 9.1 GW. 57 Solar PV generation
surpassed hydropower output in 2015 and reached levels that
were not expected in the country for several more years. 58
Germany’s annual market fell again (23% relative to 2014) to
levels of about a decade ago, and well below the Renewable
Energy Law (EEG) annual target of 2.5 GW. 59 Germany ranked
second, after China, for total operating capacity, with 39.7 GW at
year’s end. 60
Europe has become a challenging market for several reasons.
The region is transitioning from FIT incentives to tenders and
feed-in premiums for large-scale systems, and to the use of
solar PV for self-consumption in residential, commercial and
industrial sectors. 61 Further, the more that solar PV penetrates the
electricity system, the harder it is to recoup project costs. So an
important shift is under way: from the race to be cost-competitive
with fossil fuels to being able to adequately remunerate solar
PV in the market. 62 In addition, electricity demand is stagnating
and conventional utilities are lobbying simply to maintain their
position. Thus, electricity market design is increasingly important,
and there is a need for new business models. 63
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