GTM Research predicts 2016 market declines in China and Japan as India and the U.S. boom


GTM Research is expecting a slowdown in what were the two largest solar markets in 2015, as stated in its recently released Q2 2016 Global Solar Demand Monitor. The company predicts that the Chinese market will decline 5% this year, citing an 11% reduction in feed-in tariff levels and high rates of curtailment. Additionally, it expects the Japanese market to contract 12%, due to cuts to that nation’s feed-in tariff.

Despite these modest declines, the report is predicting much bigger gains in two other leading markets: India and the United States. GTM Research expects the U.S. market to grow 120% in 2016, due to a boom in projects which were scheduled for completion before the expiration of the U.S. Investment Tax Credit (ITC), which has since been extended.

Additionally, the company expects 127% growth in India’s market this year, citing a “massive” pipeline of projects which have been awarded power contracts in auctions. Together, these four markets are expected to make up 73% of total global demand in 2016.

When combined with growth in developing markets, GTM Research is forecasting that global solar installations will grow around 20% to 66 GW in 2016. This is slightly less than the 66.7 GW that Mercom Capital predicted last week, and the company is further forecasting an average of 9% growth annually to 2020.

Much of this growth will be in developing markets. GTM Research estimates that global demand outside of the top 10 markets was only 14% of the total in 2015, but expects this to climb to 17% this year and reach 35% in 2020.

The report makes special note of the Latin American market. While GTM Research expects only 2.8 GW to be installed across the region this year, the company forecasts a 28% annual growth rate across the region to 2020, substantially higher than the global average. This means a five-fold growth in the annual market from 2015 to 2020, when the company expects 7.4 GW to be installed.

Finally, the Q2 2016 Global Solar Demand Monitor looks at global trends in procurement mechanisms, noting that the number of nations that use auctions to procure solar has grown 92% to 27 nations in 2016, while the number of nations that have active feed-in tariffs has fallen 22%.