Attention surrounding global solar photovoltaic (PV) solar installations for 2014 has been high — higher than normal, even, given recent slumps in the market and trade negotiations in countries like the US. The solar PV climate has been tricky to gauge, with many analysis firms refusing to agree on how well China will do, the impact of US trade negotiations, and global totals.
Earlier this week NPD Solarbuzz released their Quarterly report which forecast global solar PV installations to push past 19.5 GW in the fourth quarter, and reach close to 200 GW total.
However, the competing firm IHS has released their own forecast for global solar in 2014, and their findings are less optimistic, predicting only 14.4 GW in the final quarter of 2014.
There are some similarities between the two reports — both are forecasting growth over the same quarter a year earlier, and both predict China and the US to be the dominant players in the quarter. Interestingly, however, NPD Solarbuzz and IHS have actually seen their predictions grow further apart as the year has progressed.
In late December NPD Solarbuzz released its predictions for 2014, summed up in their assumption the year would see “explosive growth”. NPD Solarbuzz predicted the global PV capacity to be installed during 2014 to sit somewhere between 40 and 45 GW.
IHS (and, incidentally, Mercom Capital Group, which released its predictions at the same time) predicted a similar target, while IHS (and Mercom) both felt that China’s lofty goals were unattainable — NPD Solarbuzz never really commented.
As the year has progressed, however, the predictions have differed more and more, concluding with this final forecast for the fourth quarter.
“Following a first half that saw declines in several key countries, the global PV solar market is undergoing a major acceleration in the final quarter of the year,” said Ash Sharma, senior director of solar research at IHS.
“China and the United States will propel global growth. With China installing more than 5 GW and the United States installing 2.3 GW in the fourth quarter of 2014, these two countries will account for more than 50 percent of global installations during this period.”
Michael Barker, senior analyst at NPD Solarbuzz, said:
“Global PV end-market demand continues to set new records, restoring investor confidence in the PV industry after several years of overcapacity and declining profits. Having been put on hold over the past six months, due mainly to trade-related uncertainties, record quarterly and annual shipment levels will prove crucial to investors that have been hesitant to commit to new capacity funds.”
Ups and Downs
The global solar market has seen an interesting year, with traditional markets dropping and powerhouse nations increasing.
The UK and Japan saw a strong first half of the year, while Germany and Italy are looking at another year of decline, with only 2.1 GW and 0.8 GW of new installations in 2014, respectively, down from 3.3 GW and 1.7 GW in 2013.
As mentioned, China and the US are expected to account for more than half of all global demand in Q4’14, while the UK is experiencing its strongest percentage growth so far thanks to a massive increase in utility-scale installations in the first quarter of the year.
UK developers have also taken advantage of ROCs, a scheme which will soon scale back on large-scale offerings over 5 MW. When the UK government announced earlier this year that they would be reconsidering the large-scale ROC scheme, developers rushed to beat the expected March 2015 deadline, which has been a major contributor to the year’s growth.
As a result, IHS forecasts that the UK will total between 3 and 3.2 GW of new installations in 2014, making it the fourth largest market this year after China, Japan, and the US. However, IHS predicts that, despite a strong first quarter in 2015, overall the UK solar market will tumble.
As a whole, IHS predicts that global PV installations in 2015 will slow to 53 GW of new capacity installed, a slowing of 16% compared to growth over the 2013 and 2014. Specifically, IHS predict that China’s growth will slow to 10% in 2015, while Japan will peak at 9.1 GW in 2014 before declining slightly in 2015 due to land availability, grid connection issues, and an upcoming feed-in tariff review.
The trick will be in finding out where NPD Solarbuzz think 2015 is heading, and whether their forecasts will be more in line with IHS, or whether they will continue their optimism.
From my perspective, US trade investigations, the cutback in the UK ROC scheme, and a plateauing in Japan will see these countries lessen their overall impact in 2015. However, recent growth in the Middle East, Africa, and South America will contribute to China’s own continuing growth, which I expect will head towards another year of 12 – 13 GW in line with the country’s policy to decrease their pollution levels and continued political willpower to support renewable energies.
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