Published on July 12th, 2013 | by Silvio Marcacci15
Solar PV To Hit Grid Parity, $134 Billion Annual Revenue By 2020
July 12th, 2013 by Silvio Marcacci
The solar PV industry, darkened by several tumultuous years of industry consolidation and oversupply, is about to break through the clouds to shine brighter than ever before.
Global solar photovoltaic (PV) markets will finally begin to stabilize in 2013, according to Navigant Research’s “Solar PV Market Forecasts,” and will reach grid parity by 2020 as demand reorients toward both developing countries and maturing markets.
Market activity is expected to mainly shift from Europe toward Asia and the United States, even though it recently passed 10GW installed solar. Additional opportunity also exists in developing economies like Chile, South Africa, and Saudi Arabia, and if Navigant’s forecasts hold true worldwide revenue from solar PV installations will pass $134 billion by 2020.
Solar System Prices Falling Toward Grid Parity
Several growing trends are shaping the future of the global solar PV market, and Navigant predicts they’ll soon dominate the industry. Utility-scale solar PV plants are being developed at a larger volume than ever before, while lower module prices are making systems affordable in new markets.
Solar PV modules are increasingly becoming commoditized as costs steadily decline and research paves the way for further cost reductions. Module costs have fallen from around $4 per watt in 2006 to below $1 per watt in some regions by 2012, driving solar power toward grid parity in mature retail energy markets.
“By the end of 2020, solar PV is expected to be cost-competitive with retail electricity prices, without subsidies, in a significant portion of the world,” said Dexter Gauntlett of Navigant Research.
While these new trends are improving the industry’s outlook, government renewable energy deployment targets are still the largest driving factor for solar success. However, solar PV’s growth means many government targets will soon be achieved, dampening funding streams.
“In most cases, these renewable energy deployment and cost reduction targets will be met or exceeded, with 436 gigawatts of solar PV installed cumulatively between 2013 and 2020,” continued Gauntlett.
New Financing Models Meet Dwindling Public Funding
Private and public financing seem to be adjusting to this new reality. Navigant finds that distributed solar PV is growing in popularity for off-grid locations, and innovative funding options like third-party financing by companies including SolarCity and SunRun are making solar systems possible for homeowners and businesses with little to no investment.
Navigant also highlights actions by Germany, Italy, and China to readjust solar incentives to match market prices, placing greater emphasis on on-site generation instead of total installations. These changes mean most solar module suppliers see 2017, the year after US solar tax credits fall to 10%, as the date solar PV will reach grid parity in most major markets.
Under these circumstances, PV module prices and installation costs should continue to decline steadily. Navigant predicts a conservative decline of between 3%-8% per year from 2013-2020, and installation costs between $1.50-$2.19 per watt worldwide.
Get CleanTechnica’s 1st (completely free) electric car report — Electric Cars: What Early Adopters & First Followers Want.
Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.