The U.S. solar power sector grew 67% in 2010 but still lagged European markets by a wide margin in installing solar systems, the industry's trade group said on Thursday. The U.S. market for solar energy reached $6 billion in 2010, up from $3.6 billion the previous year, according to the Solar Energy Industries Association.

But U.S. share of worldwide photovoltaic solar installations slipped to 5% last year from 6.5% in 2009 due to booming growth in Germany and Italy, where solar players enjoy generous government incentives.

Solar electric installations reached 956 megawatts in the United States last year, including 878 MW of PV systems. More than 17 gigawatts of PV were installed globally.

In 2011, SEIA expects U.S. PV installations to double from 2010, while the global market will experience slower growth due to subsidy cuts in Europe.
"Much of the global PV industry is turning its eye toward the U.S. with great expectations," the report said.

This year is likely to be "light" for concentrating solar power, or solar thermal, SEIA said. In 2010, 77.5 MW of CSP were installed, and that portion of the market is expected to grow quickly in the coming years with 41 projects totaling 9 GW currently under development.

The U.S. market has diversified geographically in recent years.

California represented about 80% of the U.S. PV market from 2004 to 2005, but last year accounted for less than 30% of the market. Other than California, the states that each installed more than 50 MW of PV systems in 2010 were Arizona, Colorado, Nevada and New Jersey.

In manufacturing, the United States increased its production of solar components substantially in 2010. Production of solar modules rose 62%, while wafer production grew 97% and cell manufacturing rose 81%.
However, stiff competition from low-cost regions such as China forced three domestic PV facilities to close last year, including a BP Solar plant in Maryland, Intel-backed  SpectraWatt's New York facility, and Evergreen Solar's factory in Massachusetts.

"Additional plant closures will not come as a surprise," SEIA said, but added that new plants would be built this year by Wacker Chemie AG, Flextronics and Stion.