Global PV installations to reach 45 GW in 2014, say IHS

A new white paper published by market analysts IHS Solar predicts that 2014 will be a strong 12 months for the global PV industry, characterized by increased capital spending, improvements in PV energy storage, the continued expansion of emerging markets and a global stabilization in the price of PV modules.

Global PV installations will reach between 40-45 GW, forecast IHS, triggered by technology upgrades prompting many PV manufacturers to spread their wings in emerging markets. However, the analysts warn, 2014 will also present a set of new challenges, chiefly the transition from subsidized to unsubsidized PV markets, an ongoing net metering debate in the U.S., and the possibility of China failing to hit its ambitious distributed solar target of 12 GW.

"After two years of a punishing downturn, the global solar industry is on the rebound," confirmed IHS senior research director for solar, Ash Sharma.

"Worldwide PV installations are set to rise by double digits in 2014, solar manufacturing capital spending is recovering, module prices are stabilizing and emerging markets are on the rise.

"However, challenges remain, including changes in government incentives and policy, an ongoing backlash to the rapid rise of renewables, and razor-thin margins throughout the solar value chain."

Reasons to be cheerful

Despite reduced support and incentives throughout most major European PV markets, coupled with a recession-wounded global economy and the lingering, malodorous atmosphere of unresolved trade disputes, 2014 will see global installations reach the 40-45 GW bracket. China will lead the way once more, predict IHS, installing 9.3 GW of PV, followed by Japan on 7.2 GW and the U.S. on 6.4 GW. France will replace Greece in the top ten, with Thailand consolidating its position as a solar heavyweight by adding a further 800 MW next year.

Assisting this growth will be a number of technical innovations that will help underpin confidence around the globe. In storage, demand will boom, with installations of PV energy storage systems set to quadruple next year, reaching 753 MW. All three market segments – residential, commercial and utility scale – will demand greater access to PV storage, with the commercial sector in particular driving demand for intelligent electricity-consumption systems.

Producers of PV wafers, cells, modules, polysilicon and ingots will up their capital spending by 42% next year, with IHS predicting a combined expenditure figure of $3.3 billion. Much of this growth will be found in emerging markets as manufacturers divert their attentions away from the developed solar regions and explore opportunities that exist in areas such as MENA and Latin America. Local capital spending in these regions – spurred by local content requirement laws and the creation of new PV manufacturing factories – is set to rise.

Speaking of Latin America, IHS has earmarked the region to enjoy a breakthrough year in 2014. The analysts expect Latin American PV installations to hit 1.4 GW (up from 300 MW in 2013), with Chile and Mexico firmly in the driving seat.

In the more developed markets, both Japan and China are set to increase their dominance of the global inverter market in 2014, increasing on 2013’s growth that saw four of the ten largest inverter suppliers hail from those two countries. In an increasingly cut-throat industry, those suppliers that can navigate choppy waters will be well-placed to further their global dominance by the end of the year.

Reasons to be fearful

The forecast was not all honey and light, however. IHS predict that despite an overall stabilization in module prices when looked at across the 12-month spectrum, early 2014 could see a further 10% decline in average selling prices due to persistent module overcapacity. This could see some manufacturers struggle to balance their books in the face of falling profit margins.

In the U.S., the debate over net metering will grumble on, with the leading solar states of California, Arizona and Colorado set to re-evaluate their policies in 2014. The impact on these proposed changes is likely to be negligible next year, but the analysts do warn that such solar shuffling could cause contention within the industry.

Finally, IHS believe that China will fall short of its 12 GW installed capacity target, reaching instead a still-robust 9.3 GW for 2013.

Solar going solo

Perhaps the most seismic shift for solar in 2014 will be the emergence of sustainable unsubsidized markets, suggest IHS. With PV costs falling and traditional energy prices rising, there could be some 700 MW of unsubsidized PV developed worldwide, driven by areas with high solar irradiation and intense demand for power.

While government subsidies and incentives have traditionally fueled the early growth and adoption of solar power, the recent scaling-back of these policies has left PV increasingly going solo – the signs are good, though, that the market might well be ready to take flight unassisted in 2014.