Further growth in global solar demand is expected in 2017, with top industry analysts predicting an increase in installations over the previous year. This growth is expected to slow significantly, however, from the more than 30% year on year (YoY) increase seen in 2016.
These most recent forecasts are likely to be welcomed by the global PV industry, after uncertainty in the massive Chinese market lead to expectations for market contraction in 2017. While the growth rates forecast by analysts are well short on 2016 figures, avoiding a contracting market is surely a positive sign.
IHS Markit projects that global demand for PV will reach 79 GW in 2017, a 2% increase on 2016’s final installation figure of 78 GW. GTM Research is even more bullish in its prediction, expecting to see 9.4% growth, and 85.4 GW installed by the year’s end. Both forecasts were released today.
The slower YoY growth projection is primarily due to an anticipated decline in the combined installation results from the current three largest markets – China, U.S. and Japan. IHS Markit projects a combined 9 GW drop from these three markets YoY. China is expected to remain by far the largest and most significant market in global terms. “Similar to previous years,” states IHS Markit’s report, “global demand depends highly on policy evolution in China.”
GTM Research expects a 30+ GW market in China for 2017, with similar conditions to 2016 thanks to another FIT cut announced for the end of June. IHS Markit, on the other hand, predicts a 16% contraction in China for 2017, putting annual installations at 26 GW, with the caveat that policy announcements later in the year could change this.
After seeing a 97% increase in 2016, the U.S. market is expected to decline in 2017, as urgency for project completion by the end of the year is replaced uncertainty over future policy support. IHS Markit predicts a 3 GW YoY decline in 2017, primarily driven by falling demand from the utility-scale segment.
India is expected to overtake Japan as the world’s third largest PV market in 2017, with GTM predicting 9.875 GW installations for the year, ahead of 8 GW for Japan. GTM Research cites a policy transition towards auctions in Japan, which led to 25-30 GW of approved projects being cancelled, as the primary reason for this.
Consolidating demand
These top 4 markets will represent around three quarters of global demand in 2017. “The concentration of global demand share among traditional major markets is more pronounced than at any time in the last seven years,” comments GTM Research in its latest Global Solar Demand Monitor. “Such that the top four markets are expected to account for 73% of total installations in 2017.
GTM Research also expects global price declines to continue into 2017, as more emerging markets introduce competitive auction systems and manufacturing capacity continues to grow out of step with downstream demand. “Component prices will continue to drop, especially in major markets” says GTM Research, “leaving the opportunity for increased competitiveness in tenders, and record low bids.
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