New predictions from Greentech Media’s market research division (GTM Research) suggest that solar photovoltaics will account for half of all the new electricity-generating capacity added globally over the next five years – and what looks like a prolonged boom period for the PV industry.
With demand now picking up from a relatively slow period of growth – last week the PV industry group Solar Power Europe reported that global PV demand had risen from 38 GW in 2013 to just 40 GW in 2014 – GTM Research analyst Adam James is predicting a 36 per cent spurt this year to 55 GW.
The acceleration is largely due to demand in the Asia-Pacific region, and China in particular, where 14 GW of PV is expected to be connected to the grid before the year is out. The US is also growing fast, and is set to install 8 GW this year, while the European market will finally bottom out and begin an upswing, believes James.
“China has emerged as the largest global market for PV, underpinned by a new feed-in tariff program and ambitious solar goals under the [latest] Five Year Plan,” writes the analyst in GTM’s Global PV Demand Outlook.
‘Massive headroom’
If that represents a slightly bullish figure compared with Solar Power Europe’s “medium scenario” prediction of around 50 GW for 2015, then James’ longer-term outlook appears positively astounding.
Whereas the European group, formerly known as the European Photovoltaic Industry Consortium (EPIA), is hedging its bets at anywhere between 47 GW and 87 GW for the PV market in 2019, James and GTM Research forecast it to hit 110 GW in 2019 and then grow to 135 GW in 2020.
“Our core thesis is that solar is poised for exponential growth that will help it account for roughly half of new capacity out to 2020,” reckons James. “While solar demand will grow almost everywhere, there are some key drivers, including unprecedented demand in emerging markets, the evolution of grid parity in Europe, and massive headroom in developing countries such as China and India."
He added: “One profound change in the global landscape is that emerging regional markets – such as Latin America, Africa and the Middle East – are expected to grow from their historical levels of 1 percent of annual demand to 17 percent over the next five years.”
Unsubsidized markets
If correct, it would mean that by the end of the decade cumulative deployments of solar PV will have reached nearly 700 GW – four times the amount thought to have been connected at the end of 2014, and approximately equivalent to the power output of more than a hundred of the world's most powerful nuclear plants (at constant output).
James also predicts that the PV market will become almost entirely unsubsidized by 2020, while the management and governance of electrical grids will have to change dramatically as PV accounts for an increasingly large chunk of somewhat intermittent generating capacity.
In Europe, where the PV market was first stimulated by generous incentives – and with particular success in Germany – demand has slumped in recent times. But the current year should represent a nadir in terms of the region’s shrinking contribution to global demand.
After dominating the global market between 2004 and 2011, Europe’s share of the global PV market has since fallen to just 21 per cent this year. But that proportion will begin to grow again in 2016, while by 2020 James anticipates that the continent as a whole will install 42 GW of PV and account for around 31 per cent of global installations.
• The GTM Research report Global PV Demand Outlook 2015-2020 is available now via the company’s web site.
