As the performance of China’s solar market has exceeded analysts’ expectations, adding 34 GW last year, a projected 7% global PV market contraction has been replaced by the figure of 9.4% growth in the latest GTM Research quarterly report, the Global Solar Demand Monitor.
With China’s substantial contribution, the total installed capacity in 2016 topped 78 GW, up from 51 GW in 2015, pushing aggregate installed capacity beyond 306 GW worldwide.
GTM Research now projects that the annual global solar market’s size will reach 85 GW in 2017, which is more than double the installed capacity in 2014.
Looking beyond 2017, the compound annual growth rate (CAGR) through 2022 will stand at 5.3%, reads the report. In the 2017 scenario, the driving seat will once again be occupied by China as the nation is expected to see a similar wave of installations to 2016, reaching roughly 30 GW.
However, GTM Research states that the country’s opaque policy landscape makes it difficult to predict the developments in terms of the FIT program.
As seen in 2016, the greatest surge in deployments was registered in the first six months of the year, with more than 22 GW ahead of the planned cuts to the country’s feed-in-tariff (FIT) program. Even though a round of FIT cuts was expected for 2017, the National Energy Administration (NEA) ultimately issued higher rates.
As stated in the report, FIT cuts may continue and lead to declining demand and a shift to smaller market segments. At a certain point, the FIT would be replaced with competitive auctions. The other option would be for the FIT program to remain in place through 2017, and the NEA to shift to competitive reserve auctions in 2018, GTM Research states.
Global consolidation
Aside from China, three more players will dominate the 2017 global solar market: the U.S., Japan and India. The big four are expected to account for 73% of global solar demand this year, with India overtaking Japan to become the third-largest market, GTM Research states.
Furthermore, the German and U.K. markets are expected to slow, while demand will take an upward trajectory in Mexico, France, Australia and a number of Middle Eastern markets.
From 2017 to 2018, global solar installations are expected to grow by less than 1%. However, GTM Research expects the market to ramp up again in 2019 as tendered projects from years past reach their completion, and as new markets begin to take off.
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