Strategies to Enter the U.S. Market

Since 2001, Europe has been a hotbed of photovoltaic (PV) development, thanks to a combination of generous and stable government incentives, rapid economic expansion, affordable financing for PV installations and widespread public interest in sustainability. The recent economic downturn, however, has led to the reduction of government incentives and the tightening of credit in the EU. PV industry insiders now see the United States as the next market for growth.

The U.S. project development space is particularly attractive. High volatility in PV manufacturing, due to recent policy decisions, combined with artificially high demand for renewable energy, fostered by renewable portfolio standards, has put project development in a sweet spot. Capgemini expects European PV project developers to be able to capitalize on their extensive experience as they seek new growth opportunities in the United States.

However, companies looking to make the move need to be prepared for several unique features of the U.S. market. Unlike Europe, with its predictable feed-in tariff regimes, the U.S. has a patchwork of highly complex, intermittently funded incentive schemes, which vary widely from state to state and year to year. Developers also need to be prepared to deal with a handful of investment banks in order to secure tax equity financing and take advantage of all available incentives.

Suitable sites for PV development have been getting more expensive, and environmental impact mitigation costs have been on the rise. Firms must also plan on how to handle the competition, as bidding for Power Purchase Agreements has become increasingly aggressive. Furthermore, any player in the U.S. PV industry must have contingency plans for a number of industry-changing scenarios, from import tariffs on Chinese PV modules to a regime change on Capitol Hill.

Success depends on entering with the right business model and the right strategy. An experienced partner can help firms navigate this unique landscape and find success in the PV industry’s next growth market.