By Roy L Hales
Though Germany is still breaking renewable records, it no longer leads the world in solar installations. China has been making significant strides, but ongoing trade disputes with the EU and US could disrupt the international situation. Thus a new research paper from Lux predicts the solar industry will grow 75% by 2019.
“With solar now fairly common in most parts of the world, it reaps the rewards of direct incentives but also faces uncertainty due to pressure on trade activity with China,” said Matthew Feinstein, Lux Research Senior Analyst and the lead author of the report titled, “Solar Market Size Update 2014: Reform for the Long Haul.”
Chinese solar modules have been hit by heavy tariffs in the US and Europe. Suppliers like Trina, Yingli, Canadian Solar, and Hanwha SolarOne used to evade US restrictions by sourcing cells to Taiwan, but America’s pro-tariff lobby has managed to close this loophole. Meanwhile the EU is investigating claims that Chinese manufacturers are violated sales agreements. This has led to harsh import duties on all Chinese imports.
China announced its own anti dumping laws, against foreign polysilicon suppliers, in the summer of 2013 and recently closed other loopholes.
The pace of China’s domestic installations is such that the nation should reach 70 GWp of capacity cumulatively by the end of 2017.
The Asia Pacific region is expected lead the World, in terms of expansion, through-out this period. More than 50% of demand will come from this region. Projected annual installation markets for this region by 2019:
China – 16 GWp
Japan – 12 GWp
India – 3.5 GWp
Thailand – 1.7 GWp
In the Middle East, Saudi Arabia, Kuwait and Iran have all joined in the race to adopt solar.
There are several factors limiting growth in the US. The Investment Tax Credit will drop to 10%, from 30%, after 2016. It remains to be seen whether Arizona’s Department of Revenue can collect property taxes from third party installers like SolarCity and Sunrun. If the state wins this lawsuit, others may adopt this policy.
Third party financing and new state regulations pushed U.S. installations to 4.7 GWp in 2013. California led the charge, installing 2.6 GWp, followed by Arizona, North Carolina, Massachusetts, New Jersey and Hawaii.
Lux predicts the United States will continue to lead the Americas, increasing its new installations to 11.7 GWp by 2019.
South America will grow 10-fold to 2.5 GWp in 2019.
Feinstein says Canada has a small place in this growth and will remain under 1 Gwp annually through the rest of the decade.
He added that, “Between Ontario’s strict domestic content restrictions and the buildup of the interconnection pipeline there, many major suppliers have pulled resources from the country.”
Europe’s solar industry is declining. Despite its impressive production records, Germany’s installations are half the level from what it was two years ago.
“Aside from storage, much of Germany’s recent record-breaking has come from generation, which is still a result of past installations (and a reflection of cumulative installations – not the new market size),” said Feinstein. “The solar plus battery systems they are deploying are out of necessity, and similar technologies will spread elsewhere. But the market isn’t single-handedly reducing the cost of batteries, whereas German demand alone changed the economics of solar back in 2009-2010.”
Italy, the continents other solar star, is also slowing down. Yet Lux notes that growth in France and UK could balance out these losses in the long term.
Other trends to note (taken from the news release):
- Cost cuts will be sustained. With cost cuts critical to the sustained growth of the industry, incremental increases in efficiency are on course from technologies such as passivated emitter rear contact (PERC), heterojunction with intrinsic layer (HIT) and selective emitter (SE). System costs will drop by between $0.36/Wp for utility-scale and $0.60/Wp for residential by 2019. This will translate to a 20% cut in total system costs.
- X-Si remains technology of choice. Crystalline silicon (x-Si) will dominate the solar market through 2019 even though other module technologies such as copper iridium gallium diselenide (CIGS), copper zinc tinc sulfide (CZTS), cadmium telluride (CdTe) and thin, flexible, epitaxial silicon (epi-Si) have the potential to become major threats in the future. X-Si, with an 84.6% market share, will grow from 31.6 GWp in 2013 to 55.7 GWp in 2019, growing at a CAGR of 8.45%. CdTe and CIGS will be a distant second – growing to 4.8 GWp and 4.2 GWp, respectively, in 2019.
Overall: 37.5 GWp of solar was installed in 2013 and Lux predicts the pace will continue to grow, at a rate of 8.3% a year, reaching 65.6 GWp in 2019. That is a 75% increase, which appears doable.
You can obtain a copy of “Solar Market Size Update 2014: Reform for the Long Haul,” from the Lux Research Solar Intelligence service.
(Image at top of page: Courtesy Lux Research, Inc)