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Clean Power Global solar PV annual installations and projections. Click to enlarge.

Published on February 5th, 2013 | by Zachary Shahan

17

Solar PV Installations Hit 32 GW In 2012, 35 GW Projected For 2013, According To IHS

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IHS, a “global information company,” has reported that global solar PV installations totalled about 32 gigawatts (GW) in 2012, a new record that beats 2011′s 28 GW and 2010′s 20 GW.

As could be expected, 2013 is projected to best 2012, as is every year after that for many years to come. IHS projects that the annual installation capacity will reach 61 GW by 2017, triple 2010′s total and nearly double 2012′s. (See the chart on the right.)

Meanwhile, the price of solar modules is projected to keep falling. The net effect is that solar PV suppliers will see their annual revenues drop, according to IHS, resulting in a continued “solar shakeout” as weaker companies fall out of the market. This is a natural process in the maturation of nearly every industry.

“According to IHS, industry revenue—measured as the system price multiplied by total gigawatts installed is expected will decline to an estimated US$75 billion in 2013, down from US$77 billion in 2012,” PV-Tech writes. “PV industry revenue was said to have peaked in 2011 at US$94 billion.”

However, IHS calculates that solar PV revenue will rise above $100 billion between 2014 and 2016, and will reach as much as $115 by 2016.

With the market tightening, but still growing fast, suppliers are under pressure to reduce their own costs however they can — through technology innovation, manufacturing innovation, waste reduction, or other measures.

The bottom line: solar PV prices will continue to drop, installations will continue to increase, and solar PV suppliers will continue to go out of business as the industry consolidates.

The Changing Market

It’s no secret that Europe has led the solar installation race, with Germany clear at the head. But other regions have been getting into the game to a much greater degree in recent years, and that’s expected to continue.

“IHS noted that a major regional shift in PV demand was occurring and that the industry was becoming truly global. Europe was said to have accounted for more than 80 percent of solar demand in 2010, declining to 53% in 2012, and forecast to slide further this year to only 39% of the global market. Not surprisingly, Asia and in particular China is on track to replace Europe as the world’s largest source of solar installations in the coming years.” A Solarbuzz report recently found that 33% of global solar PV shipments ended up in China.

With China’s rapidly growing economy and astounding energy use growth, this is no surprise. However, these aren’t the only factors affecting its solar installation growth. 7 out of the top 10 leading solar PV suppliers are based in China, but they are being squeezed hard by anti-dumping legislation in the US, Europe, and India, as well as by the shrinking profits mentioned above. As a result, the Chinese government has started to shift its focus onto stimulating solar demand (rather than solar panel production).

“IHS expects Germany to fall to third place in 2013, behind China and the United States. Japan and Italy follow in fourth and fifth, respectively,” PV-Tech writes.

“Geographic fragmentation is also expected to escalate this year. The market research firm noted that the top 5 countries by installations accounted for nearly 75% of total solar demand in 2012, but is expected to decline to 65% in 2013.

In a phrase: solar power is becoming global.

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About the Author

spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.



  • sasboy

    I am a little confused by this data – does this article mean TOTAL installed capacity or NEW installed capacity ?

  • mds

    The predictions aren’t worth much but their tracking of the growth in global solar PV installations is worth tons.

    Here’s an article providing some science on why recent gains in fossil fuel production (fracking etc.) will liking only be a short term assist:
    http://www.greentechmedia.com/articles/read/guest-post-the-future-of-energy-part-i – February 2013
    “Guest Post: The Future of Energy, Part I” “Why official oil production forecasts are probably wrong”

    Oh, and I forgot to include Greece, Spain, Italy, and even Southern Germany in my preceeding list of countries where solar PV is dropping below the cost of end-of-grid electricity.
    The solar revolution continues!

  • mds

    Zach,
    This is about the same as the GTM forecast. Maybe they will be correct about next year, maybe not. I do not buy the prediction of linear growth after that. I guarantee that is the one thing that will not happen. Linearization is a product of human thinking, not likely for growth of a disruptive technology like solar PV. If you go back three years these same groups were predicting negative growth for global solar PV installations in 2011 and 2012. I’ve waited patiently and can point they were wrong both years. In spite of the continuing shake-out solar PV installations continued to see positive growth. Now we are seeing the birth of markets were solar is cost effectively below end-of-grid electricity prices with no incentives: Hawaii, the Caribbean, other islands, residential power in Australia, South Africa, the Middle East and North Africa (Saudi Arabia, Abu Dhabi, Qatar, Kuwait, Kazakstan, Isreal, Algeria, Morocco), copper mines in the Atacama desert of Chile are installing solar to power their mines, Japan (where they’ve recently re-instated fits to help stimulate recovery their market share of solar PV production), remote areas of India dependent on diesel power generators, areas of California and Texas with tiered power rates and high summer rates for AC in the afternoon (Remember: cold is easy to store at night as cold water or cold rocks, and 1/3 of electrical power use in the USA is for AC. Solar can replace most of that AC power demand.)…. OK, that’s enough of a list. You and the readers here should get the idea. Solar predicting pundits have been consistently under predicting solar PV expansion for at least a decade. They are wrong again we will return to non-linear, exponentially increasing, growth by 2015. Make no mistake, this ain’t your Pop’s ice cream truck business, this is a disruptive growth market.

    Here is a good discussion of how/why the solar PV market will be expanding exponentially, as prices continue to drop linearly, in the USA:
    http://www.pv-tech.org/guest_blog/100gw_of_demand_and_the_coming_inflection_point_in_the_us_solar_market
    “100GW of demand, and the coming inflection point in the US solar market”
    Of course, the same applies to global solar PV growth. (This is the most important article ever written on solar PV growth, imo.)

    BTW In a number of markets mentioned above solar PV is actually half the price of end-of-grid power. This is the very definition of a disruptive growth situation. When buyers can afford the replacement technology with the financing to install it, and start saving money right away, then you start seeing a disruptive change in technology. There are no effective barriers to this. Utilities are not going to be able to stop people from saving money on their power bill in this way. They simply will not put up with it …and yes they do control the utilities.
    I guarantee this is starting to happen in the USA because solar PV panel prices are now low enough. Installation prices will continue to drop to German install levels as more and better solar PV markets open up in the USA bringing increased competition in among installers. There are no technical barriers to this, so it will happen fairly quickly. (Do businesses like to make money?) Solar resources in the USA are far better than in Germany. All the naysers and Republican sell-outs to big energy can do is try to slow this down. Regardless, it is a done deal in the USA. Vote can for the Koch brothers for president and vice president next time if you want. You can’t stop this. Change the whole congress to oil indulging tea partiers. You still won’t be able to stop it. Solar PV is now unavoidable economics in the USA and Globally.
    giggity giggity, oh yeh!

    Thank you for a well written update on IHS predictions. mike

    • http://zacharyshahan.com/ Zachary Shahan

      Completely agree. And one reason i hesitate to ever report on projections more than a year out.

      Also a reminder to finally get around to writing some posts on how off previous projections are. If you’ve got any links on that (i.e. for projections made a handful of years ago), would love to have them.

      Thanks for the great comment… might just turn that into a reader guest post. :D

      • TM

        I’d like to see KWh reported, not KW capacity. US is reported to have 1000 GW of generation capacity, but output of ~4,000 TWh / yr – that would imply ~50% utilization. The truer comparison is with how much electricity is expected to get generated compared to how much we consume in a year.

        • http://zacharyshahan.com/ Zachary Shahan

          Clearly, it’s much simpler (and thus more accurate) to add up capacity additions. data collection for production from diff energy sources is much more challenging, even more so for distributed energy sources like solar.

      • mds

        Zach,
        Sorry for delay in response. I only saw your comment a few days ago and I’ve been too busy at work to respond. I’m flattered. Thanks.
        I spent some time tonight looks through a file I have with links on “solar trends”. I distinctly remember reading negative growth ,or at least stagnant growth, predictions for solar in 2011 and 2012. I did not find those links in this file. (Maybe not surprising since I didn’t believe them when I read them. I will only save a link negative to solar if I feel it has merit, is realistic and reliable. Lame predictions would not qualify.) I hate to think my memory is faulty here. I try to be accurate and factual.
        Maybe I will have time to search more this weekend.
        I moved my home and office in the last few weeks. I confess to using an email address that I let lapse when I log in. I will try to rectify this in coming weeks, but still very busy.
        If I find those predictions, I’ll try to get ahold of you.
        Thanks,
        mike

        • http://zacharyshahan.com/ Zachary Shahan

          No problem. And thanks.

          I also didn’t keep track of dubious projections. Just need to search for them. It’s been on my list for over a year! But I’ve got a long list…. :P

  • http://soltesza.wordpress.com/ sola

    I hope that German solar installation companies start branching out to other European countries bringing their efficiency and expertise once their home market becomes too mature.

  • Kate

    Just wondering what is the world total power consumption figure
    renewable energy to non renewable?

    • Roger

      From the top of my head wind is something like 0.1-3% and solar 0.01 – 0.8%. Hydro is something like 7-25%.

    • mds

      Not sure what the global energy percentages are, but here is the USA:
      http://www.greentechmedia.com/articles/read/stat-of-the-day-wind-and-solar-at-4.72-percent-of-u.s.-electricity – October 2012
      “Stat of the Day: Wind and Solar at 4.72 Percent of US Electricity” “Renewables at almost 15 percent—that’s more than just an alternative”
      “The cumulative installed electricity generating capacity of wind is now up to 4.43 percent of the U.S. portfolio and, adding solar’s rapidly growing 0.29 percent piece, the two biggest potential renewables resources are at almost 5 percent (4.72 percent) of U.S. capacity.”

    • mds

      Of course if you’re implying solar is too small a percentage to contribute much then you would be wrong. Consider the effect of exponential growth in other disruptively changed markets: cell phones, PCs, espresso machines in Seattle… One day there is almost none, they are too large and expensive. A decade later they are everywhere. Solar is a ubiqutous and is the single largest source of power available to us. The cost of solar PV is dropping below end-of-grid parity and continues to drop rapidly. The unavoidable result of those two facts should be plan to all, but is not. Such is the nature of disruptive change. Most people don’t see it coming. Too small a percentage to have an impact? I think not. The impact will be very large, very soon.

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