The first half of 2014 was not spectacular for
solar installations globally, but with recent policy adjustments being
implemented, especially in China, another strong year is forecasted with installations of approximately 48 GW in
total, according to the latest quarterly update from Mercom Capital Group, llc,
a global clean energy communications and consulting firm.
Raj Prabhu, CEO and Co-Founder of Mercom Capital
Group, commented that “After a slow first half, it will be a rush to the finish for global
solar installations this year with a lot depending on execution in China, Japan
and the UK”.
China did not perform strongly in the first half,
installing just 3.3 GW, but this prompted recent policy changes with strong
support for distributed generation (DG). China also reduced its 2014
installation target from 14 GW to 13 GW. Though reaching this goal may prove
challenging (we said the same last year and installations overshot the target) this
year, policy foundation has been laid for a strong few years to come. As we
mentioned in our prior
update, China’s 8 GW target previously set for DG was aggressive and
unachievable. With the change of definition of a DG project to any project upto
20 MW, it will become a lot easier to achieve the target.
its attractive feed-in tariff (FiT) and energy shortage scenario, is a growing
market for solar, and has a large pipeline of projects. METI has been auditing
the project pipeline and cancelling projects that have not made any progress.
According to the new rules applicable from April 1 this year, solar developers are
required to secure land and equipment within six months of getting approvals to
avoid their projects being cancelled, which will clean up the project pipeline.
The current Abe administration in Japan continues to work towards bringing
nuclear energy back online slowly as the trade deficit has ballooned due to
liquefied natural gas (LNG) imports. This will not be easy as the majority of
the population is still opposed to the reintroduction of nuclear energy.
The Indian solar market has been stuck
around the 1 GW mark for the last few years. With a new administration in
power, policy makers have gone back to the drawing board and are in the process
of implementing new programs which will have much bigger installation targets.
All signs point to the Indian solar market taking off after 2015 and it could
become one of the larger markets along with China, Japan, and the United
The U.S. solar market has been advancing strongly
in spite of trade disputes with China, Taiwan and India and without a central
policy like in China, Japan or Germany. The US Department of Commerce announced
preliminary antidumping duties on China and Taiwan in an attempt to close a
loophole for Chinese manufacturers.
“Though there aren’t any strong signs that this is
adversely affecting the markets, the time has come to settle these disputes,” commented
While the United States lags behind Germany in
installation costs, it has been at the forefront in developing innovative
financing structures to bring the cost of capital down. Solar leases and
securitization are examples of such structures that are now being implemented
worldwide. The last quarter saw a number of announcements about Yieldcos. Financing
structures continue to evolve as the
market prepares for the expiration of the investment tax credit (ITC) in 2016.
The UK solar market continues to defy expectations
and has become the most important PV market in Europe after Germany, and could possibly
overtake Germany in installations in 2014. UK installations are set to more
than double if this year’s installation pace continues through Q3 and Q4. The
rush before the expiration of the Renewables Obligation in April 2015 will
likely drive installations towards the end of the year.
PV installations in Germany have continued to slow
down after a record 56 percent drop in 2013. Installations through July this
year were at 1.4 GW, July being the best month for installations with 345 MW
ahead of the Renewable Energy Sources Act (EEG) 2014 (which took effect from
August 1, 2014). The year should end with installations in the 2.5-3 GW range.
Subscribers to Mercom’s weekly Solar Market Intelligence Report will
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