PV installations to increase by 15 percent to 40 GW predicts IHS
“Despite several recent viewpoints claiming that the PV installations could reach up to 55 GW in 2014 and will be coupled with supply constraints and major price increases, the latest quarterly update on solar demand from IHS disagrees significantly with these views and expects installations to be in the range of 40-42 GW next year," explained Ash Sharma, Senior Director of Solar Research at IHS.
IHS says the company remains bullish about the potential for the PV industry and growth in installations but sees several risks.
IHS forecasts that China will install around 9.5 GW in 2014, much lower than the 12 GW NDRC target. This is due to a lack of framework to support the move towards distributed generation and away from utility-scale projects. The 12 GW target from the NDRC relies on 8 GW of distributed PV which IHS does not believe is feasible. The relative high cost of building roof-top installations, the lack of installers with roof-top expertise, lack of appropriate and available roof-tops and uncertainties in grid-connections caused by local grid companies will all present barriers to the China market growing substantially in 2014. We expect the NDRC to announce an action plan for distributed PV in China before the end of this year.
For Japan IHS is predicting tha a boom-bust cycle is increasingly likely. Several negative issues have arisen recently: firstly METI announced recently an official review of ground-mount projects due to the slow development of the huge pipeline of projects – we expect that many of these projects will never be built. Secondly the residential FIT program is set to end and there is uncertainty as to whether this will re-open in the next fiscal year due to lack of government support, meanwhile the FIT for non-residential PV is likely to be cut by 20% next year. Finally, the Japanese government’s recent U-turn on greenhouse gas emissions further indicates a weakening in support for renewable energy. Whilst it is still possible that Japan remains a growth market, the IHS view is that this does present the country to be risk to the overall PV industry in 2014.
As for emerging markets IHS does not see them developing as quickly as many expect. IHS estimates that emerging PV markets added 5.4 GW of capacity and will grow to 7.7 GW in 2014. Many forecasts presented for emerging markets are very bullish and do not fully account for the very different market conditions in each country. Many of these markets do not rely on direct subsidies, but instead tender mechanisms or private PPAs which can take several years from announcement to real installations occurring. The cases of Chile and South Africa show just how long these huge GW pipelines take to progress with just 100 MW and 200 MW installed in 2013 respectively. Brazil is also another good example of the difficulties PV still faces in emerging markets. Despite PV being allowed to compete in the recent bidding process, not a single PV project was selected (as predicted by IHS) due to extremely low prices that were achievable from equivalent wind projects.
"We expect 40 GW is certainly achievable," confirmed Sharma "but do not expect any possibility of demand reaching 55 GW. Based on the bottoms-up analysis of more than 100 countries, we do not expect that a shortage of PV component supply will occur in 2014, nor does it expect a major increase in prices, in fact a moderate decline in PV module, inverter and BoS prices is forecast.”
Visit IHS at www.ihs.com
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