IHS Markit has forecast 158 GW of new PV to be installed next year. This would represent a 34% increase over its expected 2020 figure, and the analysts expect a ‘wild ride’ for the PV industry in 2021.
It expects 2020 installations to come in at around 118 GW, a 5% decline on 2019. While the firm reduced its forecast earlier in the year based on the expectation of disruption caused by the Covid-19 pandemic, it notes that is not the primary cause of the drop in installation figures.
“As many PV markets started coming back mid-year after local lockdowns, module price hikes startled developers,” IHS Markit analyst Josefin Berg told pv magazine. “Developers and EPCs without hard deadlines in the fourth quarter, that had not secured modules and/or were unwilling to pay a premium, had to delay procurement and push project completions into 2021.”
This delay to project completions, coupled with an increased appetite for renewables around the world, is cited as the main driver for the expected increase in installations next year. Analysis from IHS finds that polysilicon prices rose 60% between June and September, followed by price hikes in glass and other materials that led module manufacturers to renegotiate contracts and raise their prices.
IHS Markit expects prices to remain high in the first half of next year; before a projected easing on supply chain conditions takes effect and allows them to fall from the middle of the year. “Once prices start to come down, buyers that have been able to wait will rush to get modules,” says Berg. “All we can say is, 2021 will be quite a ride.”
China and the United States are still expected to dominate, with the two representing more than half of global installations. But beyond this, a wider range of countries are expected to contribute bigger numbers. “The other eight markets among the ten largest will add up to just a quarter of the global demand, in comparison to 40% in 2019,” continues Berg. “We are seeing a parallel consolidation and fragmentation. China and the United States consolidate their positions, while more smaller markets make up the remaining demand.”
Among the top ten regions, India is expected to retake its position as the third-largest PV market – though it could be hampered if high prices persist into the second half. Australia should overtake Japan for fourth place, and Spain will remain ahead of Germany as Europe’s largest PV market. Meanwhile, the analysts note that Colombia, Peru, Portugal, Greece, Ireland, Oman, Saudi Arabia, Zambia, Thailand, Philippines and Malaysia should all be worthy of special attention next year.
“Anticipated module price declines in the second half of 2021 will create a procurement rush, but the exact supply and demand dynamics of the year are yet to be experienced,” adds Berg. “But we know that the PV industry can still surprise us all.”
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