The US solar industry smashed the record for new installations last year, deploying 1,855MW of new solar PV capacity, more than doubling the previous annual record of 887MW recorded during 2010.

According to the latest US SolarMarket Insight report from the Solar Energy Industries Association (SEIA) and analyst firm GTM Research, the level new installations grew 109 per cent in 2011, marking the first time the industry has deployed over a gigawatt of new capacity in a single year.

The report also revealed that the fourth quarter alone saw 755MW of new capacity installed, up 115 per cent year-on-year, as households and businesses rushed to complete solar projects ahead of the anticipated expiry of the US government’s 1603 Treasury grant program.

The market is being driven in large part by businesses and utilities deploying solar technologies as a means of curbing their carbon emissions and diversifying their energy supplies.

Around 800MW of new capacity was installed by the commercial sector, driven by soaring demand in California and New Jersey, while utility scale projects provided a further 758MW of new capacity, nearly triple the level added in 2010. In contrast, only 297MW of new capacity was added by residential installations.

“In 2011, the market demonstrated why the U.S. is becoming a center of attention for global solar,” said Shayle Kann, managing director of GTM Research’s solar practice in a statement. “It was the first year with meaningful volumes of large-scale PV installations; there were 28 individual PV projects over 10MW in 2011, up from only two in 2009. Furthermore, the market continued to diversify nationally; eight states installed more than 50MW of solar each last year, compared to just five in 2010. These are all indicators of a vibrant market.”

The report also predicted that the trend is likely to continue, forecasting that falling solar technology prices mean that over 2,800MW of new capacity will be added this year. Moreover, a compound annual growth rate of 30 per cent is predicted through to 2016 as growing numbers of businesses and states turn to the technology.

Similar growth predictions were also put forward for the concentrated solar power (CSP) sector with the report noting that while new large scale solar thermal power plants were built in 2011, more than 1GW of concentrated solar power projects are now under construction with a flurry of new projects expected to come online in 2013.

In total the report calculated the US boasts 4GW of solar PV capacity and 500MW of CSP capacity, as well as a solar market that was worth more than $8.4bn last year.

“The solar industry is the fastest growing industry in America for the second year in a row,” said Rhone Resch, president and chief executive of SEIA. “What we are seeing in the US is that policies are working to open new markets and remove barriers for solar. The industry is now poised for years of multi-gigawatt growth and the creation of tens of thousands of new jobs.”

However, he added that the sector continued to face a number of challenges, most notably in the form of continuing uncertainty over the long term policy environments and fears over a potential trade row with China over low cost imports of solar panels.