Global Solar Market Facing Major Shifts Ahead, Says GTM

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The global solar market has begun to show signs of a major shift, after adding 55 GW in 2015, according to new figures published by GTM Research.

According to the company’s Global Solar Demand Monitor report for the second quarter, despite the record year the global solar industry had in 2015, the slight slowdown that is expected throughout 2016 is only set to deepen in 2017. Specifically, GTM Research ties the expected slowdown to “policy turmoil” in China, Japan, and the UK, despite huge growth expected in the US and India.

GTM Research predicts 2016 is going to be another good year for the global solar market, which is expected to grow by 21% to 66 GW.

Global PV Demand 2005-2020E


However, the 11 GW increase expected in 2016 represents a slowdown that hearkens a deepening in 2017.

In a companion piece to the report, GTM highlighted the expected slowdown to be seen in the United Kingdom. According to GTM, the UK finished 2015 with an installed solar base of 9 GW thanks to a compound annual growth rate of 72% since 2006, which was largely thanks to the country’s feed-in tariff and Renewable Obligation Certificate program, as well as high retail prices for grid electricity.

However, given that the Government has now cut both programs, and with new subsidies likely to be culled by 2019, the country’s solar industry is set for a sluggish future.

China has emerged as the leading solar installer as of the end of 2015, with a cumulative installed capacity of 47 GW. China has now overtaken Germany as the world’s leading solar capacity country, having beaten Germany every year in annual installations since 2013.

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33 thoughts on “Global Solar Market Facing Major Shifts Ahead, Says GTM

  • At 66GW per year it would take 100 years to build out sufficient solar generation to decarbonize just electrical generation. Let’s hope that they’ve either underestimated advances in balance-of-system (BOS) costs or that there will be more focus on reducing BOS costs. Then exponential growth can resume.

    • Costs are falling on schedule, or ahead judging by the latest auctions in Dubai and Mexico. These forecasts reflect the old world in which renewables still depended on subsidies, and policy changes could have dramatic effects. Below grid parity, market forces dominate.

      • Exactly, and as with wind this point has already been reached in many markets. Even in the relatively low irradiance UK there are now specific examples of where there is be a business case for solar PV without subsidy, and all the time such situations are spreading.

    • And you really believe it stays at 66GW per year?
      They just looked at subsidies and their influence, not at any other aspect that affects the situation.
      They are definitely wrong for the whole picture.

      • The article, not I, talks about growth flat-lining, let alone discontinued exponential growth. My point is to question the article and hope it’s assumptions aren’t correct.

        What would be necessary to resume or sustain exponential growth?

      • Good point and I already Counted wind in that number actually. Decarbonizing the energy system means not only decarbonizing electricity today, but electrifying everything, including heating, industry, mining/steel/ etc, marine, aviation, and so on.

    • that argument is like the pieces of rice on the chessboard and the doubling 1 to 30 argument

  • UK has quietly added significant amounts of solar. Who would have guessed UK would have followed Germanys move and so quickly? Meanwhile Germany is following UKs offshore wind moves. Better and better.

    • Yeah, but now that FiTs have been slashed, growth could slow dramatically – cost isn’t low enough for it to be a no-brainer yet in this country

      • It’s also not a very sunny country.

        The UK is a small market and not really important globally. I have no idea why the writers of this report think there will be any slowdown in China or India.

        • Well, it’s sunny enough such that 10GW of installed capacity already makes a significant dent in our demand curve:

          It may not be a huge market in global terms, but the UK has the 5th largest economy and is still a significant emitter of CO2 and as thus it’s an important market.

      • FiTs are only a small part of the story – the majority of solar capacity in the UK has been supported under the renewable obligation scheme. Unfortunately that has now also been shut.

        However, companies are still investing money in developing projects that will be profitable on a “zero-subsidy” basis. Some of these will be directly wired in to the end users and so are already competitive, those that feed into the wider grid will probably start to be built by the end of the decade.

  • Forecasters have a track record of focussing on foreseeable downsides and underplaying upsides. The UK is a much smaller country than Mexico or Brazil, let alone India. The PV manufacturers do not seem to be budgeting for such a large slowdown in growth.

    • Every single report published in the last 20 years on fossil fuels has been optimistic. Every single report published in the same period for renewable energy has been pessimistic.

      This is not an accident and the public needs to know every projection coming out is skewed negatively for renewables and positively for fossil fuels.

      Every, single, one.

      It’s obvious why people are so negative towards solar and wind, they don’t even know any other way. They’ve been PROGRAMMED.

  • +Freddy D It’s *exponential* growth, not *constant* growth. Even a growth as modest as 21% means the share doubles every 4 years. If its 66 GW now and, per your calculation 6600 GW are needed for total electrification, a doubling time of once every 4 years means total domination in 25 years, even with anemic 21% growth. And just 8 years later, assuming the same growth rate, domination of *all* energy sources.

    People don’t understand how exponential growth behaves, whether on the good side, as in solar adoption, or on the bad side, where our collective economies depend on it. After all, that’s all the discount rate means: We are expecting exponential growth and, somehow, only linear consumption of resources or emission of pollutants, including greenhouse gases.

    • Assuming the projections are right, we are transitioning from exponential growth, to linear growth. The exponential phase cannot last forever, and at some point we will fall of the exponential curve. That has probably happened.

      • I really doubt we’ve hit, even come close, to the linear growth phase of the curve.

        Solar prices are still on the way down and far too many decision makers still think solar is too expensive to consider.

        If you want to guesstimate the linear rate take 30% of global electricity use (include EVs replacing ICEVs), divide by 20 years, 30 if you want a conservative number.

        • We also have saturation of demand by early adopters/first movers, so to even maintain a constant rate of deployment you have to keep finding new customers.

          A rate that grows exponentially leaves an exponential curve of installed capacity, for linear growth of the rate, the capacity curve would be a parabola. Until enough time goes by, its difficult to distinguish the two curves.

          I hope the linear trend in the forecast is an artifact of their methodology and doesn’t really reflect reality.

          • We aren’t even close to saturation of demand by “early majority”. I think the early adopters saturated back in the early 2000s, maybe?

            We also ARE closing old fossil burning plants decades before their end of life, ALREADY. In China too! And we ARE creating new electrical demand by electrification of transport and heating! You haven’t been reading CleanTechnica long, have you?

          • Plants don’t close because they hit a cetain age. They close for financial reasons. If a plant is making money hand over fist, they’ll repair or upgrade it. If it’s loosing money with no prospect of a turn around, then they close it, and try to cut their losses. Fossil plants have run into many kinds of cost issues, but there are two new ones related to renewables.

            Renewables have pushed down wholesale prices of electricity, so fossil generators were making less money when they were operating, and second, they can not win merit order against renewables, because they have to pay for fuel, so this reduced their capacity factors. They can bump up prices and capacity factors by closing plants, but if that is enough money for more RE to jump in, then you get an acceleration of the death spiral, which we are already in, in the US for coal. There aren’t any new plants getting built.

      • That’s exactly the crux of the article. My point is that I’m not sure I agree that were there yet. Hopefully not for a long time.

      • There is no chance whatsoever that we are anywhere near the end of the exponential curve for solar growth. Large portions of Africa don’t even have electrical power yet.

    • The article asserts a “major shift” in growth with “deepening …sluggishness in 2017”. I get exponential growth. The article, however is asserting that growth will slow in a “major” way.

  • The dynamic that interests me (and I think gets overlooked a lot) is the relationship between solar and storage. Incremental decreases in cost in solar makes storage more viable, and vice versa. They are both moving in very positive directions right now.

    There are many dynamics at play. It think this analysis seems somewhat one dimensional.

  • Freddy D: Flat-lining? Did you look at the graph? It shows 44% growth from 2016 to 2020! That’s a 9.5% CAGR! [66 * 1.095^4 = 95]

    • Perhaps not so clear – sorry for that. The “growth rate” flat lining, not capacity itself. OK, let’s use 9% CAGR, as the article asserts. How long will it take to get to ~5TW? Calculations: 50 years. Fair enough that 100 might be an exaggeration, but then in 50 years the world might need 10TW of solar to decarbonize.

      Point is: 9% CAGR or whatever, can’t mitigate climate change with such low CAGR. Needs to be double that or better probably. And wind too. And storage too. Thus, either hope their forecast is off or consider policy to reduce costs faster to resume a more aggressive growth rate.

      • Your calcs to 5TW: 50 years. My calcs, 31 years.

        [5TW / 307GW = 16.
        307 GW * 1.095^31 = 16.66]

        I agree, a return to the last 5 year CAGR of 35% would be wonderful 🙂

        • My latest calcs: 14.5 years, not your 50 years. So easy to get confused with this stuff! Latest numbers from GMT show a 5 yr CAGR to 2020 of 21%. So, from 307 GW (2016) to 5 GW is 14.5 years, ie year 2031. Hopefully sooner 🙂

          • Probably won’t have time to dig into calculations further immediately – mine still further out than yours. Here’s what we probably can agree on:
            Faster growth is better
            There’s a consistent tendency in forecasts to underestimate renewable growth because of the underestimation of cost declines and the power of CAGR.

            I will throw in, for fun, that these things normally play out in an S-curve meaning that at 50% market penetration, the remainder starts to hit resistance and that second half can take as long as the first 50%, depending.

            Important dialog. I’m exhausted now! Shall we start a pool for 2020 sales?

          • I have been simple-mindedly trying to guess what 50% market penetration actually *is*. Energy demand in the industrialized world is dropping. But transportation and heating are being switched from fuel to electricity. (Adding about 10% for transportation and significantly more for heating.) And the “underdeveloped” world is adding lots and lots of electric demand. I might guess that an ultimate 50% market share is roughly equal to current world electrical usage, but I may be conservative; it may be higher than that.

  • Deep breath, there is a “major shift in the GROWTH of PV installations”! It is about to drop to “21%” so what would the installs be each year
    The top row is 21%/yer, the second assume 2017 drop to 15% and 2021 drops to 10%. Still end up installing either 370/year or 187/year in 2025.
    Of course if the growth in installs stays higher than that then …
    Again these are install per year, if I assume 178GW at end of 2014. Then the total install with these WAGs would at end of 2025 would be 2048GW and 1463GW.
    Of course other might say “BS” on this slow down so you mileage might be much higher.

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