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The Solar Winds of Change

14 May 2013

Hot on the heels of the first solar capacity decline in Europe in 2012, Asia this year is poised to emerge as the world’s largest region for solar installations. Led by China, Asia will become the main driver for growth in the photovoltaic (PV) market as demand in the region nearly triples from 2012 to 2017, according to a new report from information and analytics provider IHS.

Asia experienced growth of 65 percent in 2012 to reach 9.2 gigawatts (GW) of PV installations, representing nearly one-third of the 31.4 GW installed last year. Installations in EMEA—the regions of Europe, Middle East and Africa—declined for the first time ever in 2012 to 18.0 GW, down from 19.3 GW in 2011. IHS forecasts an additional, steeper contraction this year for EMEA to 13.9 GW before returning to growth in 2014.

For the first time, 2013 will see Asia take over as the largest region for newly installed PV capacity with 15.1 GW, followed by four more years of impressive growth until it reaches 25.7 GW in 2017.

China will be the No. 1 country in solar installations this year, followed by Japan at No. 2. Demand in both countries will be driven by government incentives. For example, China is trying to bolster its ailing PV manufacturing base by supporting large installations inside the country.

Japan is facing a major energy shortage following the nuclear shutdown at Fukushima. Because of this, Japan now has the most attractive feed-in tariff (FIT) policy in the world.

Other Asian countries also are providing a boost to the overall region in terms of installations, with India seeing major demand coming from new government policies. Other smaller markets, such as Thailand, Malaysia and Indonesia, also are growing substantially now that PV costs have fallen.

Euro fall

New installations of PV capacity declined in Europe for the first time ever in 2012, falling by 7 percent from 2011. Much of the blame for the decline fell on Italy, which had been the second-largest market in the world in 2011. Italy alone saw an annual installation decline of 2.8 GW as the country’s Conto Energia V FIT incentive scheme effectively capped installations. This event also will result in installations falling again this year.

While some other European markets continued to grow—namely Germany, U.K., Greece and Denmark—they could not offset the losses from Italy as well as the other declines coming from Belgium, Spain and France. EMEA, which in 2011 suffered a 70 percent market share in global installations, will see its share fall to 38 percent in 2017.

IHS forecasts a disappointing 2013 for Italy, with installations falling some 51 percent to 1.9 GW, down from 3.8 GW in 2012.

A tale of two inverter regions

PV inverter shipments in Europe are forecast to fall in 2013 by nearly 30 percent, IHS believes, with four of the largest markets taking hits including Germany, Italy, Eastern Europe and Greece. These declines are due to cuts, amendments or cancellations of incentive policies.

The development of the European solar market this year is highly dependent upon the outcome of the ongoing trade dispute with China. In fact, the introduction of a mandatory register of Chinese imported modules already has impacted demand due to a limited availability of low-cost Chinese modules and price increases in some cases.

Compare this to the developments happening in Asia where inverter demand is soaring with strong growth predicted in 2013. Asia is forecast to account for 44 percent of inverter shipments this year, IHS believes.

China and Japan will be the largest markets in the world in terms of inverter shipments in 2013, with Japan having reacted very strongly to the introduction of an attractive FIT. IHS has recently raised its forecast for Japan in 2013 and 2014 by more than 1 GW for each year.

Read more >> PV Inverter 2012 Revenues Grow Despite ASP Declines



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