New photovoltaic installations in the U.S. in the first quarter of 2013 totaled 723 megawatts (MW), an increase of 33% over the same period a year ago, the Solar Energy Industries Association (SEIA) has reported.

The residential market grew by 53% over the first quarter of 2012, and was 11% higher than the last quarter of 2012. Non-residential installations, however, were off by 20%, and total first-quarter installations were actually less than fourth-quarter 2012 installations by 45% (723 MW compared to 1,310 MW), the report noted.

A summary of the SEIA’s quarterly U.S. Solar Market Insight report said total PV capacity in the U.S. is now 7,962 MW.

At the same time, the average cost of a residential installation fell to below below $5 per watt in the first quarter. Non-residential systems were installed at an average cost of less than $4 per watt. From the first quarter of 2012 to the same period this year, residential prices dropped by nearly 16%.

“On the whole, however, installed PV prices vary greatly, not only state to state but also project to project,” the report said.

The SEIA said three factors could slow continued PV growth:

• a debate over net metering and how to value distributed generation,
• changing rate structures, and
• the availability of capital.

China squabbles with Europe and U.S. over the cost of PV modules

The chief reason for a steep drop in the cost of solar electricity over the last several years is the huge volume of solar panels shipped from China. Chinese companies are exporting about $30 billion of PV panels to the U.S. annually, according to The New York Times.

Manufacturers in the U.S. and Europe complain that the Chinese government is unfairly subsidizing the industry and allowing Chinese manufacturers to charge less than the cost of production, a practice called dumping. A number of U.S. and European producers have gone out of business.

The U.S. already adds a tariff on Chinese PV panels amounting to about 30%, and the EU in early June adopted tariffs of about 50%. That brought an immediate response from China, which said it would investigate Europe’s lucrative wine exports to China, worth $980 million a year.

Negotiations between China, the U.S. and the European Union to settle the dispute are ongoing.