According to IHS, the global solar market will achieve double-digit installation growth in 2013, but market revenue will fall to US$75 billion. Industry revenues-measured as system prices multiplied by total gigawatts installed-peaked at US$94 billion in 2011, but fell sharply to US$77 billion in 2012. Revenue is projected to decline once again in 2013 to US$75 billion, on the back of lower volume growth and continued system price declines, given that solar component prices continue to fall, said IHS.
In addition, the solar module industry will consolidate further in 2013, according to the research institute. As 2012 comes to a close, fewer than 150 companies will remain in the photovoltaic upstream value chain, down from more than 750 companies in 2010. Most of the consolidation will involve companies going out of business entirely. Many integrated players, particularly those based in China, will fold up shop in 2013. The large expense of building and then operating integrated facilities that are underutilized will be more than many can handle financially.
IHS stated that solar module prices will stabilize in second-half 2013 as oversupply eases. Despite a drastic decline in prices along the silicon supply chain since March 2011, solar prices will stabilize by mid-2013. Changes in market dynamics will help restore the global supply-demand balance.
On the other hand, solar trade wars will rage on in 2013, yielding few winners, said IHS. As of November 2012, there were six different solar trade cases proceeding involving China, Europe, the United States and India. This cycle of sanction and retaliation will not help solve the fundamental challenge of overcapacity plaguing the global solar industry.
The research institute also stated that South Africa and Romania will emerge as solar markets to watch in 2013. The two countries next year will expand from virtually no solar installations to capacity of several hundred megawatts. The solar uptake in both markets is driven by distinct factors. In South Africa, solar additions will mainly stem from the tenders awarded in 2012; in Romania, the growth driver will be a green certificate (GC) scheme that will stay in place until 2014.
Double-digit returns remain possible for solar projects in Europe in 2013. With the subsidy schemes that are currently in place, all EU countries continue to offer attractive conditions for both private and institutional investors, according to HIS. Meanwhile, an evaluation of no-incentive scenarios shows that the most mature market segments are on the cusp of grid parity, allowing healthy returns on investment.
IHS predicts that solar will surpass wind in the US. The year 2013 marks an important milestone, representing the first time that new US solar PV capacity additions will be greater than those made by wind. This is partly a result of the near-term uncertainty over the federal production tax credit for wind. However, it is also a reflection of solar PV's increasing competitiveness as a form of renewable power generation in some key US markets.
China will become the world's largest solar market. Total solar installations in China next year are predicted to surpass 6GW, allowing the country to surpass Germany as the number one solar market on the planet, IHS pointed out.
Energy storage will transform the solar industry. Batteries increasingly are being seen as an attractive way of retaining solar electricity, letting people use the power later in the day to avoid paying high prices for electricity from the grid. Next year IHS forecasts a big jump in the number of residential solar systems installed with batteries attached.
IHS also predicted that new technology will revive equipment vendors' prospects. Improved technologies will help solar manufacturers cut costs, increase margins and ultimately distinguish themselves from the competition. Such a focus creates an opportunity for both manufacturers and equipment suppliers to obtain larger revenue streams.
