"As U.S. Installations Doubled, Global Solar PV Market Grew 40% In 2011 To 27 GW"
China solar installations jump 470% last year, may hit 2015 target of 15 GW early
Major PV country markets (GigaWatts). Source: NPD Solarbuzz 2012 Marketbuzz
Global deployment of solar photovoltaics increased by 40% in 2011, with 27.5 gigawatts of projects installed in 12 months, according to a new report from NPD Solarbuzz. Last year’s strong installation figures prove how quickly the technology can be deployed compared to large, centralized forms of generation.
Those installations helped the industry bring in $93 billion in global revenues — a 12% increase over 2010.
America’s solar industry saw 109% growth in 2011, with 1,855 megawatts of projects installed, according to analysis from GTM Research. That crushed the previous record of 887 MW, and finally brought the U.S. into the “gigawatt club.” The country represented about 7% of global PV demand in 2011:
Will that domestic and international growth continue this year?
The expiration of the Treasury Grant Program, which provided developers with a cash payment of 30% of a project’s cost, could set the industry back a bit over the coming year. The grant program was created in order to make up for the collapse of the tax equity market (i.e. the players that can monetize tax credits). While the financial markets have bounced back since 2009, some fear that the limited number of tax equity financiers may limit installations.
But there’s still a pipeline of projects that were started in 2011 to take advantage of the grant before it expired. GTM Research expects that pipeline to prop up the U.S. market into 2012:
This quarter we have increased our base case 2012 forecast from 2.5 GW to 2.8 GW as a result of the large quantity of product safe harbored to meet the Section 1603 Treasury program year-end deadline. Most of these projects will be completed in 2012 and will prop up installation totals throughout the year. In addition, we are more bullish on near-term growth prospects in the California commercial market and in the prospects for many of the utility-scale projects in the pipeline to attain financing. In truth, 2012 market size will still be largely determined by factors that have not yet been decided, such as the final outcome of the trade petition and market dynamics in Germany and Italy.
With some key markets slowing down in 2012, Solarbuzz analysts are questioning whether the 2011 growth rate will be sustained in the short term:
“Aggressive cuts in incentives in Germany and other European countries have set up the potential for a global market decline in 2012, but ahead of these the rush to install is on, especially in Germany,” said Craig Stevens, President of NPD Solarbuzz. “These cuts in tariffs will force companies to embrace self-sustaining marketing models earlier than they expected. Meanwhile, Chinese policy makers will face a decision whether to stimulate their domestic market even more than planned to support their globally dominant manufacturing base.”
The top five countries — Germany, Italy, China, the United States, and France — represented three quarters of global demand in 2011. Incentive cuts in the top three European markets could slow momentum and reduce the region’s share of installs.
But what happens in China matters a great deal. That country, which historically had no domestic market for solar PV installations, saw a stunning 470% increase in deployment last year. Chinese officials have set a goal for 15 GW of installations by 2015 — a target that could be reached by as early as 2013.
The bottom line is that if markets like China and the U.S. can make up for slumping demand in Europe, 2012 may be far better than expected.