Last week, Frost & Sullivan announced the availability of a new report, titled “Global Solar Power Market”, that finds the market earned revenues of $59.84 billion in 2013 and estimates this to double to $137.02 billion in 2020.
According to the report, increased focus on curbing greenhouse gas emissions and other pollutants, favorable legislation, and the need to enhance energy self-sufficiency and security are helping the solar power market grow rapidly.
Global solar photovoltaic (PV) demand in 2014 is dominated by the Asia-Pacific region, which will account for approximately 46% of annual installed solar PV capacity, the report says. China, Japan, India and Australia will continue to be the top four countries driving regional demand. With panel prices coming down drastically, Asian manufacturers are now looking at value chain integration and technical efficiencies to differentiate their products from other suppliers in the market, Frost says.
In Europe, the market also continues to grow. Germany was the first EU country to incentivize solar PV power with feed-in-tariffs (FiTs) in 2006. The market-installed capacity has expanded rapidly and it is still the largest solar power market in the world. By 2020, Germany, France, Spain, Italy and the U.K., together, plan to install more than 75 GW of solar PV capacity, the report says. The total global installed PV capacity in 2013 was 137GW. Also, the price of solar PV systems has experienced a steeper fall due to less FiTs and speculations on further subsidy cuts in the core solar power market. The obligation of EU member states to the Kyoto Protocol has also driven the solar power market.
In the meantime, the U.S. has become a lucrative destination as the price of solar PV systems has declined due to the reduction of imports from China following the imposition of anti-dumping and illegal subsidy tariffs on imports.
However, the solar power market has been challenged by high installation and maintenance costs of solar PV systems, the intermittent supply of solar power, low return on investment of solar PV systems, and the availability of less expensive renewable energy sources, such as wind and bioenergy. Since banks have been funding projects related to these proven renewable energy technologies, solar power suppliers are facing increasing competitive pressures. In addition, the strong reliance on government support has hampered market development, in some cases involving the withdrawal of subsidies or incentives, Frost says.
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