Clean Power

Published on June 28th, 2016 | by Joshua S Hill


Global Installed Solar PV Capacity Will Surpass 756 GW By 2025, GlobalData

June 28th, 2016 by  

Total installed solar PV capacity globally will surpass 756.1 GW by 2025, according to new projections published by GlobalData.

According to GlobalData’s latest report, the global installed capacity of solar PV will increase from 271.4 GW in 2016 at a compound annual growth rate (CAGR) of 13.1% to 756.1 GW in 2025. This will represent a decline in growth from the CAGR of 50.1% seen during the 2006–2015 period, but that is to be expected with solar commanding a larger and larger installed base.

Unsurprisingly, GlobalData predicts China will remain a considerable influence on the global renewables market over the forecast period, remaining the world’s largest solar installation market and increasing its share from its current 19.7% of global cumulative solar PV installations to 31.3% in 2025.

“China is a world leader in renewable energy investment, having proved itself a leader in wind power installation, wind turbine manufacturing, and solar PV manufacturing,” explained Pavan Vyakaranam, GlobalData’s Project Manager covering Power. “Solar PV capacity in the country will continue to grow during the forecast period, from 60.5 GW in 2016 to 236.7 GW in 2025, at a CAGR of 18.5%.”

Going on: “Solar PV will play a significant role in China’s future energy supply, as the government looks to this resource to meet growing energy demand. The central government, spurred on by growing environmental concerns, has planned many initiatives for rapid development of the domestic PV market. For example, China has implemented a Feed-in Tariff (FiT) scheme for utility scale and incentives for rooftop PV, while the National Energy Agency has been promoting off-grid solar installations.”

The key factors continuing to drive strong growth in China will impact other countries as well.

“Policies such as net metering, FiTs, and renewable portfolio standards have had a key impact,” Vyakaranam continued. “Indeed, the US and Canada have implemented all three of these policies, and will register notable CAGRs of 14.6% and 10.6%, respectively in cumulative installed capacity during 2016–2025.

“Finally, the formation of solar alliances will also drive growth globally. Those such as the International Solar Alliance formed at COP21 between India and France may improve the investment scenario in the solar energy sector, helping it to grow further in the near future.”

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  • jburt56

    1 TW plus or bust.

  • Ian

    Can someone explain this to me: Solar has grown at a CAGR of 50% for the previous decade, at which time cost of the technology was quickly falling but still more expensive than most alternatives in most places. The cost of solar is now falling through the range of costs of competing technologies which should be a tipping point that propels solar to even faster gains, Yet every projection out there foresees slower growth going forward, not faster. I understand that as the solar takes over a greater share of the market, there is less room for growth, but solar only makes up about 1% of electric generation worldwide. It seems like solar must be a long way from market saturation.

    • Matt

      While I don’t agree with the 13%, I believe their thinking goes something like.
      Growth is not about % total capacity, but what portion of new additions go in each year. So what is total additions each year? This is driven by demand (dropping in much of developed world, but growing else where) and existing power plant replacement. A coal power plant has a long possible life, so are they assuming most run their whole life (40-60 years) or that they get closed much sooner. Most likely they are assuming at least 40 years for coal plants and that they are not closed early, and that PV is not built past this “demand” amount. Lots of assumptions there. As we have seen in Oz with rooftop PV or in Germany where they are trying to slow RE of all types, sometimes RE is installed past the “calculated demand”.

      • JamesWimberley

        Solar and wind are not yet meeting the annual increment in global demand. The conflict with existing fossil capacity is indeed a real issue, but it’s limited to rich OECD countries. Note that at some point in the fall in cost of renewables, they start becoming cheaper than the *running* costs of coal and nuclear, so rapid growth should start again.

    • Kevin McKinney

      Declining CAGR doesn’t mean ‘slower growth’. To illustrate this, I created a model in Excel. It assumes a constant annual 10% manufacturing capacity growth rate, ‘seeded’ with 10 units the first year. (So in the second year, 11
      units are added, in the third 12.1, and so on.) This is run over 20 years.

      Comparing the first year and 20th year numbers, you get this:

      End of year capacity: 10; 640.02
      Growth: 10; 67.27

      So over the time span, we see capacity growth of over 6400%, and annual total growth increases of over 6700%.

      Technically, CAGR is supposed to be calculated over more than one year, so let’s compare CAGR for years 2 and 20. The numbers are 110%, and 23.11%. So, although the CAGR decreases exponentially, we still see increasing annual growth (since each year’s growth is, by the terms of the model, 10% than the year previous.) On a graph, the three quantities look like this (note that capacity is rescaled for display by a factor of .2).

      • Ian

        Thanks for the analysis Kevin. But still it seems to me that we should be on the cusp of accelerated growth and at least a flat CAGR as cost fall through the range of competitiveness in ever more locations.

        • Kevin McKinney

          You are welcome. I, for one, hope you are correct. And it does seem realistic to me to hope for accelerating capacity growth over the coming years, given the policy choices that are being made today, and the cost trends that you cite.

          However, I did run the numbers for 50% CAGR, just out of curiosity. That means that every year, year after year, you add a third as much in new capacity as you already possess in cumulative capacity. The numbers get big, fast.

          For example, year 1 began with 10 units. That more than doubles by year 3, to 22.5 units. You break 100 in year 7 (113.91 units), and 1000 in year 13 (1297.46 units). During that year, you add 432.49 units, which is pretty impressive compared with your starting capacity of 10; but we’re only getting started. At the end of year 20, we hit 33,252.57 units, of which 11,084.19 units are new additions.

          I hope and expect that we’ll see increasing growth. I’m far from sure that it’ll accelerate enough to maintain the kind of ~50% CAGR we’ve been seeing for much longer, though.

          If you are right, I’ll be delighted. If I’m right, don’t be too disappointed, as long as the magnitude of new additions keeps growing consistently.

    • dcard88

      It will have little to do with saturation until we get up past 20% Solar. If 50% increases were to continue, we would need about 50 more large manufacturing plants in the next 10 years.

      • Shiggity

        We’ll have that many in 5, same goes for batteries.

    • eveee

      You are not the only one.mits nonsense. Let’s think of it this way. Substitute cell phone for PV and see if it makes sense something like this…

      Cell phone use has been growing at a 50% CAGR and the available market is still large, but since it’s growing fast, we think that will slow down to,about 13%.

      Sorry to be blunt, but it’s stupid. Cell phone growth increased as it hit the tipping point, not decreased. Solar us just nearing the tipping point, not past it. By tipping point, I mean costs equal or lower than stupa thus quo.

      I cannot give any rational explanation for the poor future estimates so common except that people just don’t get exponential growth and technology adoption. Here is what technology adoption looks like:

      Notice every curve accelerates faster not slower after it reaches the tipping point.

    • Shiggity

      Correct solar pv projections have it dominating global electrical supply by ~2032.

      Anyone saying anything differently is either being paid to do so by other interests or simply doesn’t understand the power of exponential technologies. Ironically as they hold a smartphone in their palms.

      Solar PV adoption won’t slow down, it’s going to SPEED UP.

      You are 100% correct.

      • Bob_Wallace

        PV installation will almost certainly speed up. For a while.

        Speeding up means building more panel and silicon plants. At some point the money people will take a long look and see the world reaching and end of solar growth. The point at which solar reaches its peak supply percentage. Let’s say 40%. (Wind takes 40%, hydro and other RE take 20%.)
        They’re going to do some math. Their math will tell them that if they finance a new plant it won’t have time to return the investment and make a reasonable profit before the 40% wall is hit.

        Let’s say it takes ten years to reach cost recovery and profit. If we’re moving toward 40% at 2% a year then new plant production will stop at less than 30%. (It could be close to 20% if we’ve got enough capacity to do 2% a year. Ten years would take us to saturation.)

        At that point year to year solar growth will stop and we’ll cruise to 40% based on the plants available.

        That could be changed by governmental action which creates “artificial” profits via subsidies/whatever. And we might decide to do that.

  • dcard88

    Since we are speculating here, I beleive we can and will do much better than 13% per year.

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