Solar market revenues predicted to hit $137bn

Revenues from the global solar market are predicted to more than double in the next five years according to a new report.

The study from analysts at Frost & Sullivan forecasts that revenues will rise from $59.84bn last year ” when the total global installed PV capacity in 2013 was 137 GW ” to $137bn by 2020.

Frost & Sullivan states that current global demand for solar photovoltaic projects is dominated by the Asia Pacific region, which it says will account for approximately 46 per cent of annual installed solar PV capacity.

“China, Japan, India, and Australia will continue to be the top four countries drAsia solariving regional demand,” sates the report. “With panel prices coming down drastically, Asian manufacturers are now looking at value chain integration and technical efficiencies to differentiate their products from other suppliers in the market.”

The report says that the European solar market is also growing, thanks to several factors.

“In Europe, the price of solar PV systems has witnessed a steeper fall owing to less feed-in tariffs and speculations on further subsidy cuts in the core solar power market. The unilateral obligation of the European Union member states to the Kyoto Protocol, which is designed to decrease emissions of greenhouse gases, has also driven the solar power market in this region.”

Frost & Sullivan says that Germany is the biggest player in the European solar market and together with France, Spain, Italy, and the UK, it plans to install more than 75 GW of solar PV capacity by 2020.

Frost & Sullivan’s energy & environmental industry Analyst Pritil Gunjan said: à‚ “The global solar power market is benefitting from various incentive schemes in the form of tradable green energy certificates, FiTs, subsidies, and tax rebates for the use of renewable energy for power generation.”

“However, these incentive schemes continue to be very heterogeneous, making solar PV penetration rates vary widely based on local and regional policies.”

Because of this, Frost & Sullivan says that policy decisions will drive the market in the next five years. “Environmental policies and upgrades/modifications of the electricity grid, in particular, will have a heavy influence on electricity prices for final consumers and determine the extent of solar power uptake.”

It says that the “potential of the solar power market has been reined in by the high installation and maintenance costs of solar PV systems”.

“Along with the intermittent supply of solar power and the low return on investment of solar PV systems, the availability of less expensive renewable energy technologies such as wind and bioenergy also challenge the market.

“As banks have been funding projects related to these proven technologies, solar power suppliers are facing increasing competitive pressures. In addition, the strong reliance on government support has impeded market development in some cases involving the withdrawal of subsidies or incentives.”

Gunjan à‚ explained: “Drafting strict clean energy regulations and offering adequate subsidies to the renewable energy sector will be essential. Equally important will be maintaining clarity in the incentive guidelines for solar power so that project developers, investors and customers are not misled and can make proper investment decisions.”

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