With over 400 photovoltaic (PV) companies, China is a ‘powerhouse’ when it comes to solar energy.
According to recent findings from NPD’s Solarbuzz, factors like China’s policy incentive deadlines and seasonality are responsible for decreasing the global PV demand to 6.2 gigawatts (GW) or by 23% in the first quarter of 2013. China, which accounts for 20% of the current global PV demand, is creating a challenge for PV manufacturers and vendors as a result of their volatile demand cycles.
SolarBuzz analyst Michael Barker reports that this trend is likely to persist over the next 4 years and will hinder the PV market growth, though vendors who focus primarily on China will be most affected.
Predictable PV Demand Cycles
There will be more predictable PV demands in 2014 from the US, Japan and Europe. Solarbuzz reports that 65% of PV demand in Europe will come from Germany, France, Italy and the UK. This amounts to 2.7GW of the total 3.2GW demand in Europe. The Japanese market remained the strongest in the first half of 2013, while the US is expected to have an increased demand during the second half of 2013. The rest of the world market, including Southeast Asia and the Middle East, is expected to generate 3GW per quarter.
Vendors with a focus on Japan, US and Europe will benefit from the emerging trends of improved and stable quarterly demands, which will pave the way for better long-term planning.
Decline of European Solar Power
For the last decade European solar power has been on the decline. From 2011 to 2012 there was a sharp fall from 22.4 GW to 17 GW, bringing its capacity down to 55% from 74%. According to the European Photovoltaic Industry Association’s (EPIA) market outlook, it’s clear that Europe’s dominance in PV has ended, and the shift has moved to China, Japan, US and India.
Future of Solar Power
According to Lux Research, the PV market will reach $155 billion by 2018. They forecast the PV market will grow to 35 GW in 2013 to 61.7 GW in 2018. Lux Research also reports that “record low prices brings the gross margin down to near zero but solar installations have become increasingly competitive in more and more markets.” Also 2015 is expected to see a balance in demand and supply indicating a reduction in cost and increased profits for manufacturers.
Clenergy and CGN Solar Engery recently announced a joint venture to install PV solar plants in Lijiang, China generating 300 MW by 2015.
The Japanese government will invest $204 million to develop a battery energy storage with a capacity of 60 Mega-watt hours on the island of Hokkaido. The expected completion date is March 2015.
The Indian government has pledged to double the capacity of renewable energy from 25GW to 55GW by 2015. In the state of Gujarat, a 1MW pilot-scale solar project is pending for approval. The long-range plan is to install panels over the highways to ultimately generate 4.4GW of solar power.