By 2015 utilities are likely to consider large-scale photovoltaic (PV) installations in the United States even without incentives or renewable energy requirements at the state or federal level. A new report from GTM Research projected that PV will, at that point, become economically competitive with other forms of electric generation, including natural gas-fired generation.

“From the perspective of the U.S. utility PV market, the importance of being within competitive range of a natural gas project is nearly as valuable as becoming cheaper,” according to the Nov. 30 report, The U.S. Utility PV Market: Demand, Players, Strategy and Project Economics Through 2015.

If developers can convince utilities that PV is cost competitive, and if utilities can make the same argument to regulators, it should allow the PV market to grow beyond incentives and renewable requirements.

The PV market—excluding other forms of solar generation, like solar thermal troughs—already is a $1 billion U.S. market in 2010. According to the study, the market is “scaling rapidly as feed-in tariff markets such as Spain and Germany reach saturation. This points to greater focus on the U.S. utility market as a global industry driver over the next five years, with market potential approaching an estimated $8 billion per year by 2015.”

“The U.S. will become the largest market for solar but not for a couple of years,” said report author Shayle Kann. “There are 5.4 gigawatts that currently have contracts signed with utilities, and that’s for PV alone.”

Kann said this is due, in part, to a couple large U.S. companies.

“First Solar is a dominant player in the market, and a huge portion of generation is going to use First Solar.” SunPower will also play a major role.

While First Solar’s thin-film PV will play a significant role in adoption of PV, Kann said the majority of PV will remain silicon-based. Reductions in cost will come in reduced permitting costs at the same time as PV prices fall, he said.

The report also observed, “There may even be new state RPS standards and/or a national RPS with a solar requirement, each of which would enable new demand in additional states.” The report said “the promise of the U.S. PV market lies in a true 50-state demand center, and we anticipate the market heading in that direction over the next five years.”

The federal tax credit will remain an important driver in the spread of PV, according to Kann. But, of course, state level incentives are also important.

“When they’re removed, the market hurts,” he said. “But the overall market will remain strong regardless.”

Image courtesy of NREL.