Solar PV arrives as a mainstream technology

With higher economies of scale, the cost of solar power systems for both residential and utility-scale PV will reach grid parity by 2020 and increase uptake of decentralised solar energy. As a result, stakeholders from raw material suppliers, solar cell manufacturers, solar module manufacturers, and balance of system equipment suppliers to system integrators and installers are positioned for robust growth.

New analysis from Frost & Sullivan, Global Solar Power Market—2016 Update, finds that market revenues stood at $113.75bn in 2015 and will grow at a CAGR of 9.5% to reach $179.13bn in 2020. Installed capacity with grow from 50,780 to 76,600MW at a CAGR of 8.6% for the same period.

Pritil Gunjan, Research Analyst, Energy & Environment, Frost & Sullivan, commented: “Pro-solar incentives and the recently made pledges at the COP 21 summit will ensure that the market for solar PV continues to grow exponentially over the next 5 years. Grid integration of renewables and investment in energy storage initiatives are other market enablers.”

Geographically, Asia will see aggressive expansion of solar PV fuelled by economic growth, urbanisation and greater electrification:

• Asia’s market share will rise to 64.1% by 2020 with China, India and Japan together accounting for more than 80% of all solar installations planned over the next five years. China and Japan will lead with compelling FiT rates and capacity based rebate programmes.
• North America will witness a robust growth with the extension of investment tax credit eligibility for solar generators until 2019. By 2020, the region will have about 20m residential prosumers. Fiscal incentives, technological advancements and new solar leasing models will be strong drivers.
• Europe, however, will suffer a setback due to withdrawal of subsidies and incentives. Huge overcapacity, coupled with price decline of solar modules, will see suppliers struggling to make profits.
• Investments in grid infrastructure, especially in remote off grid locations, will energise demand in the emerging markets of Latin America and Africa.

“Extreme weather variations, declining energy reserves, and increase of distributed generation technologies will compel utilities to seek newer models supporting energy efficiency and energy management initiatives. The solar PV supply chain participants are expected to develop new technologies that will lower costs and integrate PVs with flexible infrastructure grids. Innovative business models to integrate solar power will also open opportunities in smart metering, demand response and net metering,” added Gunjan.