Solar looking sunny
The solar industry is an artefact of government – driven exclusively by government subsidies like feed-in tariffs, tax credits and tender schemes.
Recently, these subsidies have been scaled back as PV installations have grown rapidly, because lower system cost has made the original schemes very attractive and also costly to support for 20 years or more.
But, reports IHS, the solar industry is back in business.
“After two years of a punishing downturn, the global solar industry is on the rebound,” says IHS’ Ash Sharma, “worldwide PV installations are set to rise by double digits in 2014, solar manufacturing capital spending is recovering, module prices are stabilizing and emerging markets are on the rise. However, challenges remain, including changes in government incentives and policy, an on-going backlash to the rapid rise of renewables and razor-thin margins throughout the solar value chain.”
IHS believes that global installations will be in the range of 40 to 45GW in 2014, and that demand for PV energy storage systems (PVESS) will quadruple. Worldwide installations of PVESS in 2014 will amount to 753 megawatts (MW), up from 192 MW in 2013. Strong growth will be generated by all three major segments of the market—i.e., residential, commercial and utility-scale PVESS. The largest growth will be in the commercial sector, driven by demand for intelligent electricity-consumption systems in buildings.
Persistent manufacturing overcapacity for PV modules will result in a 10% decline in ASPs in 2014, prohibiting any further increase in profit margins for suppliers during the year.
IHS predicts global capital spending in 2014 by producers of PV ingots, wafers, cells, modules and polysilicon will rise by 42% to reach $3.3 billion.
With demand shifting away from the developed solar regions of the United States, the European Union and China, PV manufacturers are gaining interest in running operations in emerging markets, a phenomenon expected to result in new factory openings and boosting local capital spending in areas such as the Middle East, South America and parts of Africa.
In 2014 Latin America will see installations ip soar to 1.4 GW in 2014, up from 300 MW in 2013. The majority of additions will take place in Chile and Mexico, countries without any conventional subsidies for PV.
In mid-2013, net-energy metering (NEM) became one of the most contentious issues in the U.S. solar PV industry. However, while states including Arizona, Colorado and California are re-evaluating their NEM policies, the impact of any potential changes on the U.S. distributed PV industry is expected to be negligible in 2014.
The rise of solar markets in Japan and China is spurring the rapid growth of the PV inverter business in those countries, boosting market share for domestic suppliers in 2013. Four of the world’s Top 10 inverter suppliers during the first nine months of 2013 were from China or Japan when ranked on a revenue basis, up from two in 2012. As Chinese and Japanese suppliers start to expand their international presence, IHS predicts that those that survive the intense competition will be well-placed to increase their global market share.
In November, China’s National Energy Administration (NEA)—a subsidiary of the National Development and Reform Commission (NDRC)—announced huge plans for 12 GW of PV projects in 2014. These consist of 8 GW of distributed PV and 4 GW of ground-mount systems. While the announcement is hugely encouraging for both the Chinese and global PV industry, IHS firmly believes that such an ambitious target for distributed PV installations is not achievable, and the reality is that actual totals will fall far short of this goal.
IHS believes that cost and price of PV modules will decline by more than 40 percent in 2020 compared to 2013.
High electricity prices and the falling cost of PV will allow 700 MW of unsubsidized PV to be developed worldwide in 2014, especially in regions with high irradiation and intense electricity demand.