It has been a very good year for solar PV, with an incredible 48% year on year increase of installations from 2015, according to data from Mercom capital. These unprecedented installation figures have been predominantly driven by the Chinese market, which saw 22 GW installed in the first half of the year alone, but also by impressive installation figures from the U.S. and Japan.
The big new coming out of Mercom’s report, is that, overall, it expects 76 GW of solar to be installed across the world in 2016. This is a 48% year on year increase on the 51.2 GW that was installed in 2015, which is one of the biggest yearly increases in recent memory, representing a giant step in the right direction.
Without a doubt, China drove the installation statistics, with 22 GW in the first half of the year alone. Mercom forecasts that this will reach 31 GW for the full year, which is a huge rise on the original yearly target set of 18.1 GW, which was partially a result of installers rushing to finish installations before the June 30 tariff deadline.
“Global solar demand will oveshoot most forecasts made earlier this year due to an unprecedented level of activity in China,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group. “Record installations in China followed by a slowdown resulted in an oversupply situation, which led to a module price crash. Low module prices are helping demand recovery going into 2017.”
To back up the impressive statistics from China, the U.S. is expected to install 13 GW of solar over the course of the year. This is slightly less than originally hoped, due to the extension of the ITC, which has taken time pressure away from solar projects in the country. Japan was the country that will come in third with 10.5 GW expected, and India continues its rise up the chart with 4.2 GW expected to have been installed by the end of the year. This double of the 2.1 GW that was installed in 2015.
2017 to be better than originally feared
A massive oversupply of solar modules in 2016, mainly due to a slow-down in the second half of the year in China, has resulted in module prices falling dramatically. Mercom claims that prices have fallen approximately 30% over the year, and 21% since June. This has had various effects on global solar markets, some positive and some negative.
The falling prices are expected to stimulate growth in some markets, including the U.S., which is now forecasted to install another 13 GW in 2017. With China reducing its solar target for 2020 to 110 GW, down from 150 GW, there was fear that installations would dramatically reduce. However, Mercom predicts that 17.5 GW will still be installed in 2017, in anticipation of another round of solar tariff cuts.
Overall, Mercom is forecasting 70 GW to be installed globally in 2017, which would be an 8% contraction from 2016. This is disappointing, but is actually less of a reduction than had been originally feared. On top of this, GTM Research predicts that after 2017, the industry will enjoy consistent annual growth.
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