Clean Power Solar PV Market Growth 2011-2020

Published on July 12th, 2013 | by Silvio Marcacci


Solar PV To Hit Grid Parity, $134 Billion Annual Revenue By 2020

July 12th, 2013 by  

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.

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About the Author

Silvio is Principal at Marcacci Communications, a full-service clean energy and climate policy public relations company based in Oakland, CA.

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  • Others

    Solar is much cheaper than Oil and that’s why Saudi Arabia and Arab Emirates are investing in Solar power generation. Many other countries which use Oil for power generation like Mexico, Venezuela can install solar, reduce oil for power generation and instead export the fuel to make money. Its a win win for both exporting and importing countries.

    A big win for Solar and renewable energy and our ONLY Planet EARTH.

  • globi

    1. PV generation has already reached grid parity in many regions:
    PV electricity is already well below wholesale electricity pricing for instance in Cyprus or in Chile:

    2. Household PV systems in Germany are already well below grid parity, as the feed-in tariffs for small PV systems < 10 kWp amount to only 15.07 cents/kWh, while households pay more than 25 cents/kWh forr electricity:

    3. There are no regional differences in PV-module pricing. And PV-module prices are well below $1/W: .
    (Only entire PV-system costs differ.)

  • arne-nl

    My guess is that energy consultants usually underestimate the grassroots effect of PV. Once consumers get really ‘heated up’, there is no stopping the hundreds of millions of installations. It will steamroll the entire energy industry.

    This has a considerable dose of optimism, but could happen easily. As I watch my collegues at all jumping in to install solar because it makes great financial sense and most people do like to do something for the environment (as long as it doesn’t cost them). In many cases it is just the added ‘feel good’ benefit they need to make the decision. (And don’t forget the parents that want to set a good example for their children).

    • Bob_Wallace

      I suspect people who are involved in a sector typically fail to recognize emerging technologies that are likely to replace what they are used to.

      I saw that with desktop computers. I’d tell someone like my CPA how we would soon have computers he could use in his office to crank through tax numbers and they would poo-poo the idea. They couldn’t see something small replacing the big processing center they sent their paper for computerizing.

      And people who were well established in film photography often couldn’t/wouldn’t see how digital was almost certain to replace chemical photography.

      Big American steel companies weren’t able to see past their open hearth smelting.

      • I think Kodak dropped the ball on the whole digital picture transformation….

        • Bob_Wallace

          Absolutely. Kodak was ahead in digital photography. They made some of the important inventions and owned a lot of valuable patents. They built the first digital SLR. But management couldn’t see past film and they destroyed one of the highest value brand names in history.

  • JamesWimberley

    Typical consultants’ over-caution. Grid parity by 2020! Who’d a thought it. And global growth will slow down after 2016, when solar will be cheaper everywhere and ever more countries have enabling policies. Enabling, not subsidising.

    “Market activity is expected to mainly shift from Europe toward Asia and the United States, even though it recently passed 10GW solar” (my italics).
    That has it exactly the wrong way round. The more you put in the cheaper it gets. Absent a sharp policy reversal as in Germany and Spain – which US decentralization makes impossible – , growth in the USA is likelier to speed up than slow down.

  • Steeple

    With energy and electricity costs so high it Asia (at least 3X what we pay in the US), it only makes sense that Asia be a leader in the adoption of solar, particularly in more remote areas.

  • Shiggity

    One good metric for measuring global solar pv is watts/person. By the end of this year we’ll be around 18 watts (peak) of grid tied solar pv for every person on the planet. Ask yourself, how quickly could we potentially get to one grid tied solar pv panel per person? Using 220W for the average panel for simplicity, the world would need about 1,600GWs. Might be a lot sooner than you think.

    Watts/person are already off the scale in places like Arizona and southern California.

    • Bob_Wallace

      I think installation times are about a half day per house, if you’re talking experienced installation crews.

      I’ve done three residential systems. Took me a day or two each. Mostly because I was using old style racking which meant a lot of little machine screws, lock washers and nuts. And wire stripping.

      In addition to grid tied systems where there will be several panels per person there’s also the booming industry of micro solar which provides a very simple system for people who have no access to electricity and for whom the grid would be years away.

      These systems can run a few LED lights and charge a cell phone. They cost less per week to purchase than what people have been spending on kerosene and candles. And they pay off, unlike kerosene and candles.

      Quite a while back more than a million systems had been installed and new ones were going in at over 1,000 per day. Numbers must be considerably higher now. Those numbers were only one country and now micro solar is happening in several countries.

      • JamesWimberley

        “.. old style racking, which meant a lot of little machine screws, lock washers and nuts. And wire stripping.” Don’t modern mounting systems use security clips, prewired harnesses, and so on? Microinverters make it even simpler.

      • Ronald Brakels

        Here’s a time lapse video of a system being installed in Australia. One can tell from the limited movement of the shadows that it doesn’t take long at all:

        • Bob_Wallace

          That video made me tear up.

          I looked at it, looked back at the racks in my yard (I ground mounted) and compared the process.

          Each panel required taking the cover off each connection box, knocking out an access hole in the box and installing a weather proof ‘nut’. Then cut a piece of cable the right length, strip the outer cover and strip the three wires. Insert the wire through the weather proof seal, loosen terminal screws inside the connection box…..
          These folks slap them down and plug them in. That’s how we get the BOS costs in line. That, and getting the sales costs down.

          There’s new tech in the large scale array business. Now robotic machines pour a continuous ballast/footing down the row where the panels will be installed. Robot installers put the panels in place. I think humans plug them in.

          This is how we get to $1/watt and make solar as cheap as wind. It’s something that I didn’t think possible and now it seems that it might be.

          • Ronald Brakels

            Yep, they’ve got it down to a fine art. Or rather, a straight forward, rapid, process. I don’t know how much time the installation actually required, but it looked like three workers did it in about an hour.

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