Demand outlook for the solar industry remains
strong and global solar installations are forecasted to be around 46 GW in
2014, according to the latest quarterly update from Mercom Capital Group, llc,
a global clean energy communications and consulting firm. Global installations
in 2013 are estimated to come in at about 37 GW, in line with Mercom's forecast.
Raj Prabhu, CEO and Co-Founder of Mercom Capital
Group, commented that the revised forecast reflects the ever-shifting market
conditions and the new Chinese installation goal. “China recently announced an
aggressive 14 GW installation goal, a 2 GW increase since our previous update in
Within the new 14 GW goal, China has set an
aggressive target of 8 GW for distributed generation and another 6 GW for
utility-scale projects with specific quotas in individual provinces. Mercom expects Chinese installations to be in
the 13 GW range in 2014.
The Chinese government decision to let Shanghai
Chaori Solar Energy Science & Technology Co. default on its bond issue
shows that they are serious about not bailing out companies that don’t fit
strict manufacturing norms. Though the effect of this case on the larger solar
market may be minimal, Mercom will be watching the Chinese financial markets
closely as major economic indicators are currently weak.
Japan is expected to install solar in a similar
range (7-7.5 GW) to last year. Japan faces some challenges, however, as the
Ministry of Economy, Trade and Industry (METI) weeds out projects that,
although approved, are unlikely to be built. In addition, the country’s
generous feed-in-tariff (FiT) is likely to be reduced in the next month and a
three percent sales tax increase could further dampen demand.
The U.S. solar market is forecasted to install 6.4
GW in 2014, spurred by utility-scale projects and an energetic residential sector.
Solar lease has been the big driver of residential installations, with third
party finance companies raising $3.3 billion in residential and commercial tax
equity funds in 2013. System costs in the United States are still high compared
to Germany, but innovative financial instruments, including asset-backed
securities, third party finance and YieldCos, are helping bring the cost of
capital down. Trade disputes, however, continue to be an issue with the United
PV installations in Germany are forecasted to be
around 2.75 GW in 2014 . Germany’s role in the solar market continues to
decline as policy support retreats. In a bid to reduce price hikes in
electricity, the latest policy proposals include bringing the installation
levels closer to 2,500 MW a year. There is a proposal to replace the FiT with a
tender system in 2017 in addition to a requirement that new solar projects
greater than 500 kW market and sell electricity directly to consumers.
The current crisis in Crimea illustrates the
importance of energy independence and the vital role solar energy and other
renewables can play if added prudently to
the energy generation mix, Prabhu noted. “Energy security is a key reason for
governments around the world to review their energy generation mix and invest
in domestic solar and other renewables,” he said.
Other markets highlighted in the update include the
United Kingdom and India, both of which
installed approximately 1 GW in 2013 and are expected to install similar
numbers in 2014. Mercom revises its forecast quarterly to reflect on-the-ground
Subscribers to Mercom’s weekly Solar Market Intelligence
Report will have access to the full update. To become a subscriber, visit: http://bit.ly/MercomWeeklyMISubscribe.
Capital Group, llc, is a global communications and consulting firm focused on
clean energy and financial communications. Mercom’s consulting division advises
cleantech companies on strategies for strategic decision making and new market
entry and provides custom market research. Mercom delivers highly respected
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