U.S. solar PV installations surged 20 percent to 930 MW in the July-September quarter compared with the previous three months, and the U.S. is poised to install more solar than Germany for the first time in more than 15 years, according to a just-released update from the Solar Energy Industry Association (SEIA) and GTM Research.

The growth in U.S. solar PV is a tale of two scales. On the one hand, residential PV installations were a record 186 MW, up 45 percent year-on-year, displaying a consistent growth both quarter-on-quarter and year-on-year, noted Rhone Resch, SEIA president and CEO. On the utility-scale side, 52 projects were completed during 3Q13 totaling 539 MW of capacity. The non-residential sector, as defined in this report, continues to be flat; this includes “non-residential” projects on the customer side of the meter with a retail power purchaser, but not wholesale distributed generation defined as sub-20 MW projects on the utility side of the meter.

U.S. PV installations by market segment, 1Q10-3Q13. Source: U.S. Solar Market Insight Q3 2013, SEIA/GTM Research

By its nature the utility-scale segment is a roller-coaster where one or two projects can significantly move the needle. The pipeline through 2014 looks good, but will increasingly depend on federal and state policies to keep going strong. “What we tend to do as an industry is get caught up in policies that were created 4-5 years ago” which are now starting to run out, Resch said. “The reality is there’s a whole new suite of federal and state policies that are going to have a huge impact,” such as the Department of the Interior’s (DOI) work in crafting solar energy zones and approving large-scale projects to the Federal Energy Regulatory Commission’s (FERC) fast-tracking of interconnections to solar resource areas. Reliance on loan guarantees is also fading as private finance becomes more comfortable with large-scale solar projects. And states are pushing ever higher renewable portfolio standards — and rejecting efforts to roll them back — which could require more and more solar energy coming online.

CSP projects in particular are starting to be challenged by project runways that will soon bump into the projected 2016 expiration of the Investment Tax Credit, which will significantly change their economics, Resch acknowledged. But he also pointed out that one of the policy advancements being pursued is softening the ITC’s “commence construction” language as was done for the production tax credit (PTC).

There’s also a piece missing from the utility-scale solar puzzle, he suggested: some utilities are prevented from owning them in their own service districts. Progress is being made by some such as Georgia Power, Resch pointed, but many states are deregulated and utilities are prevented from owning those assets. Thus the utility-scale sector will continue to grow on the backs of holding companies and independent power producers (IPP) — which means ultimately regulated utilities “are going to have to embrace distributed solar generation,” he said.

More tidbits from the newest version of the U.S. Solar Market Insight report:

Blended average PV system prices fell another 4 percent to $3.00/Watt, vs. $3.13/W in 2Q13 and $3.59/W a year ago. Compared with 2Q13, residential average prices dropped nearly 10 percent to $4.72/W, and utility-scale dipped about 3 percent to $2.04/W. Nonresidential prices actually rose about 6.5 percent quarter-on-quarter to $3.96/W, but that’s still about 6 percent lower than a year ago. Note that across most state lines there’s still a big range in average prices, but overall they were anywhere from 2-10 percent lower from 2Q13s.

Average residential system sizes have stabilized at around 6 kW. For nonresidential system sizes shrunk significantly in 3Q13 to below 100 kW for the first time since 2011, which should help open up more financing options. Non-residential solar is “finding a bit of a sweetspot,” observed Resch. Mostly, he said, “it’s consistent with a refined product” from financing to available space for ground-mount systems.

California installed 455 MW of solar in 3Q, still far and away the leader. North Carolina (3rd), Nevada (5th), and Vermont (12th) rapidly ascended the state rankings for PV installations during the quarter. Much of Nevada’s growth was largely driven by SunEdison’s Spectrum Solar project which came online during the quarter, while both North Carolina and Vermont each brought online a number of new 1-5 MW projects, according to Ken Johnson from SEIA. Some other notable states also have slowed (New Jersey, Hawaii), but others have picked up the slack (Massachusetts, Arizona, Tennessee).

The report also offers some thoughts on what’s ahead for U.S. solar installations in the current quarter and beyond:

Looking ahead to 4Q13, SEIA/GTM see residential solar still growing. Expect more than 1 GW of utility-scale PV installations, a first for any solar market segment. On top of that will be the 280-MW (AC) Abengoa Solana parabolic trough CSP plant, and the 392-MW (AC) Ivanpah CSP project which should begin delivering electricity to the grid by year’s end.

In total SEIA and GTM now predict roughly 4.27 GW of solar PV will be installed in 2013, slightly below their previous estimate of 4.37 GW (mainly due to a 70-MW haircut from the nonresidential side) which would put U.S. ahead of Germany for the first time in more than 15 years. Overall they see “just over 5 GW” of combined solar PV and CSP coming online this year, a 27 percent increase from 2012, which should push total installed capacity to around 13 GW.

Forecasting into 2014 the report sees more state-level programs kicking in to boost installations (New York is specifically highlighted), while California and Massachusetts are expected to keep outpacing the pack. And looking even further out, the report visibly hikes its expectations for both 2015 and 2016 by several hundred megawatts, though the numbers weren’t provided.

U.S. PV installation forecast and market segmentation through 2016E. Source: U.S. Solar Market Insight Q3 2013, SEIA/GTM Research