Solar Demand Outlook
Improves for 2017 with 70 GW
Mercom Capital Group, llc, a global clean energy communications
and consulting firm, forecasts global solar installations to reach 76 GW in
2016. Solar installations to hit 70 GW in 2017.
Click here to get the full report: http://bit.ly/MercomSolarNov2016Form
“Global solar demand will overshoot most
forecasts made earlier this year due to an unprecedented level of activity in
China,” said Raj Prabhu, CEO and Co-Founder of Mercom Capital Group. "Record
installations in China followed by a slowdown resulted in an oversupply situation,
which led to a module price crash. Low module prices are helping demand recovery
going into 2017.”
Rather than a slowdown as expected earlier, global solar demand outlook has improved
for 2017 as steep module price declines have triggered a rebound in China in
anticipation of the next round of tariff cuts. In fact, this latest rebound has
stabilized module price declines somewhat. Similar demand recovery due to
improved project economics is expected in other markets.
After installing 15.1 GW in 2015, China
overshot its 2016 installation goal of 18.1 GW in the first half of 2016 alone
with approximately 22 GW installed as developers rushed to complete projects
before the country’s June 30 tariff deadline. Demand fell after the tariff
cuts, which triggered a drop in solar module prices resulting in an oversupply
situation. Spot module prices have fallen approximately 30 percent YTD and
about 21 percent since June. Due to unprecedented installation levels, China’s
National Energy Administration is looking at a 27 percent reduction in the
country’s solar installation target from 150 GW to 110 GW by 2020.
Mercom’s forecast for the U.S. solar market in 2016 is approximately
13 GW. The forecast is mostly unchanged
from our earlier estimates as channel checks have consistently indicated slower
than expected activity after the ITC extension was announced in December 2015.
A substantial number of large-scale projects have been postponed to 2017 due to
the absence of an impending ITC deadline.
The U.S. market is projected to grow about 78
year-over-year in 2016. Utility-scale solar projects continue to drive the U.S.
solar market with an estimated pipeline of more than 30 GW. Power purchase
agreements (PPAs) are being signed at lower and lower prices and rapid module
price declines due to the oversupply situation in China are expected to stimulate
activity in the U.S. even more as project IRRs improve. All of this could lead
to a strong 2017 for the U.S.
The unexpected election of Donald
Trump has left the market questioning if it will be impacted by the
results. While the U.S. Clean Power Plan, President Obama’s signature climate
change policy, may be the first casualty, the ITC extension will likely remain
due to the bipartisan nature of how the extension was
passed and the fact that the solar sector employs more than 200,000 citizens.
Japan and India will follow
China and the U.S. as the third and fourth largest markets this year. India has
a chance to move up to the third spot in 2017 based on its current project
pipeline. Japan is expected to install 10.5 GW this year. The tariff revisions coming up
in Japan in April 2017 could be steep. Reverse auctions and regulations are
also expected in April 2017 as Japan moves toward auctions in an effort to
reduce subsidy bills. India is expected to install about 4 GW this year and
double that in 2017. The Indian solar market is largely driven by auctions and has
a robust 20 GW pipeline.
The European market continues
to decline with only the U.K., Germany and France expected to install more than
1 GW in 2016. In 2017, France and Germany are the only European markets forecast
to install more than a gigawatt.
Australia is expected to
install approximately 1 GW in both 2016 and 2017.
solar markets to watch include Latin America, an important growth market led by
Mexico, Chile and Brazil, and the Middle East and North Africa (MENA)
region, which is also a significant up and coming market especially after the
collapse of oil prices. South Africa and Saudi Arabia are forecast to show
Subscribers to Mercom’s weekly
Solar Market Intelligence Report will have access to the full update. To become
a subscriber, visit: http://bit.ly/MercomSubscribe
About Mercom Capital Group
Mercom Capital Group, llc, is a global communications and consulting
firm focused exclusively on clean energy and financial communications. Mercom’s
consulting division advises cleantech companies on new market entry, custom
market intelligence and overall strategic decision making. Mercom’s consulting
division also delivers highly respected industry market intelligence reports
covering Solar Energy and Smart Grid. Our reports provide timely industry
happenings and ahead-of-the-curve analysis specifically for C-level decision
making. Mercom’s communications division helps clean energy companies and
financial institutions build powerful relationships with media, analysts,
government decision makers, local communities and strategic partners. For more
information about Mercom Capital Group, visit: http://www.mercomcapital.com. To get a copy of Mercom’s popular market
intelligence reports, visit: http://mercomcapital.com/market_intelligence.php.