Today Mercom Capital released its solar PV market forecast for 2016. The company predicts another year of market growth, although Mercom expects 2016 to tie with 2012 for the slowest rate of growth in the last ten years at 13%.
Mercom’s vision for 2016 includes an even greater level of dominance by the top three markets China, Japan and the United States which it expects to represent 65% of the global market.
The company expects China to remain the largest market in the world, installing roughly 19.5 GW in 2016. Mercom notes that the nation has already installed 10 GW in the first nine months of 2015, despite curtailment issues in western provinces and delayed subsidy payments.
The company also says that a new 5.3 GW installation quota for provinces that meet or exceed installation goals is likely to support a higher level of completed projects in both 2015 and 2016.
As for the United States, Mercom expects PV installations to jump to 13 GW in 2016, in advance of the drop-down of the federal Investment Tax Credit at the beginning of 2017. While this is less than the 15 GW that GTM Research predicts, it will still be the largest rate of growth since 2012 and will make the nation the #2 market for solar globally.
The Japanese market is expected to slip slightly from 9.5 GW in 2015 to 9 GW in 2015, the second year of slight market contraction. Mercom notes that Japanese domestic module shipments have fallen in the past two quarters due to feed-in tariff reductions.
For Europe, Mercom expects the UK market to lead again in 2016, followed by Germany and France, but also notes the uncertainty inherent in the ruling coalition’s rapid policy changes.
One of the biggest surprises in the report is India’s solar market. Mercom is predicting that India will nearly double installations to 3.6 GW in 2016. This is an impressive number, but much less than the 12 GW which Indian PM Narendra Modi had predicted at the recent climate talks in Paris.
Mercom notes that momentum has increased since the government announced a 100 GW target by 2022. However, the company also warns about the viability of projects awarded in recent auctions, due to what Mercom describes as unrealistically low bids.