According to forecasts by IHS Technology, cumulative global installed PV capacity will have surpassed 310 GW at the end of 2016. Just six years earlier, at the end of 2010, worldwide capacity was still at 40 GW. About 70 % of those 310 GW will be installed in China, the United States, Japan, Germany and Italy.
Since the market for new installations in Germany has lost steam, IHS expects the United States and Japan to overtake Germany, thus making it the fourth-largest installed base for PV.
“A continued stagnation of major European PV markets due to weaker financial incentives has caused PV additions in Europe to slow dramatically in recent years, but global demand remains strong,” explained Josefin Berg, Senior Analyst of solar demand for IHS Technology. “The supply chain continues to benefit from a period of relatively stable pricing, and there could be a new wave of capacity expansions.”
At the end of 2015, the global PV industry continued to enjoy strong growth. While some regional markets present challenges to local suppliers, the current outlook for the global industry in 2016 remains positive. After global PV installations grew by 35 % in 2015, IHS predicts them to grow by another 17 % in 2016. This would mean that in the fourth quarter of 2016 an additional 21 GW of PV capacity will be installed worldwide.
10 GW more new installations than in 2015
Overall, IHS expects the global installed capacity for photovoltaics to increase by 69 GW in 2016 – 10 GW more than in 2015. Most of this increase (9.3 of 10 GW) will be due to the installations in the U.S., India and China, with a growth increase of 5.6 GW, 2.7 GW and 0.9 GW, respectively. Overall, the U.S. are expected to install about 15 GW worth of new photovoltaic projects in 2016.
Among the reasons for this predicted increase in growth of the United States’ PV installations is the multi-year extension of the investment tax credit (ITC) and a strong demand for utility-scale PV. In 2016, the States in the West and Southwest will account for roughly 65 % of total demand, according to IHS Technology.
“The extension of the tax credit relieves pressure on the industry to complete projects ahead of the 2016 deadline and breathes new life into the US solar industry,” said Camron Barati, North America Solar Analyst for IHS Technology. “Many feared the solar industry in the United States, which has experienced tremendous growth over the last several years, might collapse in 2017 without an extension of the ITC.” While all market segments are expected to benefit from the ITC extension, utility-scale PV will benefit most and account for over half of newly added capacity from 2016 to 2019.
U.S. growth will decline in 2017
“Residential and commercial PV will experience sustained growth through the forecast period,” Barati said, “but mounting pressure from utilities to revise retail net metering rates and the falling cost of large-scale generation will limit growth opportunities in the U.S. outside of well-established state markets.”
Although IHS expects the Unites States’ PV market to decline by 30 % in 2017, the analyst still predicts it to grow in the remainder of its forecast period (2016 to 2019). The Northeastern states will be the only region in the country that will not experience a decline in 2017, due to a lower reliance on utility-scale PV demand and a higher proportion of residential and commercial PV demand. IHS has identified three US states that are projected to install over 1 GW in 2016: California, Nevada and Texas.
A strong demand for PV will also support stable module pricing; therefore IHS calculates average PV module prices to fall by less than 5 % in 2016 – the smallest year-on-year decline IHS has recorded so far. In 2015 industry average gross margins for modules reached 22 %, the highest level since 2011, mainly due to low polysilicon prices and strong pricing in some markets.
Tanja Peschel
Photovoltaic Feed