Published on December 27th, 2018 | by Charles W. Thurston0
The Solar Tracker Global Growth Rate Is Stunning
December 27th, 2018 by Charles W. Thurston
The multi-billion dollar global demand for solar trackers is red hot, and expected to continue to glow red for at least the next five years, according to the latest market forecast. The global single-axis solar photovoltaic tracker market is expected to show a cumulative average growth rate of close to 28% during the period 2019-2023, according to a December research report by Technavio.
This increase in sales is expected to drive the market value up to $27 billion by 2024, according to a June analysis by Global Market Insights.
As stunning as this expansion sounds, the growth momentum of the market is expected to decelerate this year due to a decline in the year-over-year growth. That is because the 2017 market grew a whopping 32% in 2017, representing 14.5 gigawatts of solar capacity, according to a February report by GTM Research.
Regardless of the exact percentage of the expansion, the great news is that solar energy is expanding at light speed globally, as more governments realize that solar energy is less expensive than fossil fuel alternatives to power the national grid. Indeed, while the United States is expected to continue to be the strongest country market for solar trackers over the mid-term, China, Brazil, Mexico, and the UAE are also driving up domestic capacity quickly.
Technavio reckons that the Americas led the market in 2018 with more than 47% of the market share, followed by the APAC and EMEA regions, respectively. “Mexico and Brazil are two of the fastest-growing solar markets in the world, each accounting for over 1.5 gigawatts of tracker shipments in 2017,” said Scott Moskowitz, senior analyst at GTM Research and author of the study, said at the time. “The U.S. utility-scale market was significantly stunted last year due to tariff uncertainty, so it took a back seat to Latin America,” he said, referring to the uncertainty surrounding the U.S. tax credit for solar installations.
More Solar Boost for the Buck
Solar trackers are either single-axis or dual-axis in design, and tilt toward the sun to maximize the absorption of light. Typically, a single-axis tracker can deliver 20% more solar energy than a fixed-tilt mount. Dual-axis trackers can often deliver 35% more solar energy than a fixed-tilt mount, but at a slightly higher cost than single-axis trackers. If bifacial solar panels are used rather than standard monofacial panels, the boost can be another 10% to 15%.
These yield boosts are accompanied by modestly increased costs over fixed-tilt that still make the cost/benefit analysis a no-brainer. Lazard’s 12th Levelized Cost of Energy comparison, as of November, showed that a single-axis utility-scale solar system costs around $45 per megawatt-hour, compared with $170/MWh for fixed-tilt commercial or industrial installations. Lazard adds in all costs from capital to operation and maintenance to reach these LCOE calculations.
In terms of market leaders in sales, GTM in February ranked NEXTracker at the top of the shipment rankings, accounting for a third of all solar PV trackers sold worldwide in 2017. Array Technologies ranked second and Soltec third, the analysts say.
Microgrids Augment Solar Tracker Demand
The utility segment held the largest single axis solar PV tracker market share in 2018, accounting for nearly 86% of the market, Technavio says. This application segment is expected to dominate the global market throughout the forecast period, they say. But this will slowly change.
While most of the world demand for solar trackers has been for utility-scale installations, the commercial and industrial (C&I) market segment, and even the residential segment is beginning to bloom, thanks the the continuous decline in the overall cost of solar, especially in solar panels. One geographic arrangement for shared solar that feeds both the C&I and the residential segments is the microgrid, which often has one or more large anchor solar generators, surrounded by residential solar installations, all interconnected and managed as an energy island.
Technavio explains that microgrids are small-scale power grids, which have their own generation and storage resources. The microgrids can operate independently or collaboratively with other small power grids. A microgrid can connect and disconnect from the main power grid to operate in either the grid-connected mode or island mode. It is referred to as a hybrid microgrid when integrated with the main power grid, the analysts say.
“The power grids are not always stable in many countries. Microgrids play a vital role in protecting consumers from outages in some regions that have frequent power outages owing to the relatively unstable power grids,” a senior research analyst at Technavio. “The microgrids are used in regions where the grid-connected power is not accessible or has limited availability. These microgrids can function autonomously or operate in parallel with the conventional grid,” the analyst says.