JEDDAH – The cumulative global market for solar PV is expected to triple by 2020 to almost 700 gigawatts, with annual demand eclipsing 100 gigawatts in 2019, the “Global PV Demand Outlook 2015-2020: Exploring Risk in Downstream Solar Markets” report revealed. Solar demand will likely be almost entirely market-based in 2020; a dramatic shift from 2012 when almost all demand was premised on direct incentives. One implication of an increasingly unsubsidized market is that management and governance of the electric grid will change dramatically, creating both new opportunities and challenges for solar companies. This transformation is already underway with the implementation of market-based mechanisms for PV procurement and solar companies exploring innovations in business model design. The report explores the high-level trends, drivers, and risks shaping global PV demand out to 2020. It includes forecasts and risk assessments for major markets, analysis of regional and emerging markets, alternative scenarios for global demand, and distillation of key themes such as unsubsidized market development, business model and financial innovation, and the regulatory transformations for the electric grid. In the Low Scenario, the global market could remain between 35 and 39 GW annually in the five coming years. The combination of declining European markets and the difficulty of establishing durable new markets in emerging countries could cause this market stagnation. While the decline of PV system prices in most markets paused in 2013, the installations that were triggered before that pause compensated for the EU decline. Most important markets outside Europe grew in 2013 and without these lost GW in Europe, the global PV market growth would have been even more impressive and reached well above 40 GW. PV remains a policy-driven business, where political decisions considerably influence potential market take-off or decline. The highest probability scenario assumes a low market in Europe and a growing market in most emerging regions. In the High Scenario, the European market would first grow around 13 GW in 2014 before increasing slowly again to around 17 GW five years from now, a decline from EPIA expectations last year. In that case, the global market could top more than 68.6 GW in 2018. The global PV market progressed in 2013: after two years of around 30 GW of installations annually, the market reached more than 38 GW in 2013, establishing a new world record. But the most important fact from 2013 is a rapid development of PV in Asia combined with a sharp drop of installations in Europe. This record could have been even higher. In fact almost 40 GW have been installed in 2013 if we consider the 1.1 GW more installed by China. China became the top PV market in the world in 2013 and achieved the world's largest PV installation figure in one year with 11.8 GW connected to the grid, after Italy installed 9.3 GW in 2011 and Germany installed between 7.4 GW and 7.6 GW from 2010 to 2012. Japan scored 6.9 GW and took the second place in 2013, while the USA installed 4.8 GW. Europe's market had progressed rapidly over the past decade: from an annual market of less than 1 GW in 2006 to a market of over 13.7 GW in 2010 and 22.3 GW in 2011 - even in the face of difficult economic circumstances and varying levels of opposition to PV in some countries. But the record performance of 2011, driven by the fast expansion of PV in Italy and a continued high level of installations in Germany, was not repeatable and the market went down to 17.7 GW in 2012 and almost 11 GW in 2013, the lowest market level since 2009. After holding the world's top PV market position seven times in the last 14 years, Germany was only fourth in 2013 with 3.3 GW, and yet still by far the largest European market. The UK was the second European market with 1.5 GW. Italy, which was the second European market in 2012, installed more than 1.4 GW in 2013, down from 3.6 GW the year before and 9.3 GW in 2011. Other European countries that installed more than 1 GW are Romania (around 1.1 GW) and Greece (1.04 GW). Together, China, Japan, the USA, Germany and the UK accounted for nearly 28.3 GW, or three-quarters of the global market over the last year. This is even higher than in 2012 when together the top-five global markets represented around 65%. Regionally, the Asia-Pacific (APAC) region, which in addition to China and Japan includes Korea, Australia, Taiwan and Thailand, scored first place in 2013 with close to 56% of the global PV market. Europe came second with almost 11 GW out of 38.4 GW or 29%. The third leading region is North America, with Canada developing steadily alongside the USA. Elsewhere, the Middle East and North Africa (MENA) region represents untapped potential for the medium term. PV also shows great potential in South America and Africa, where electricity demand will grow significantly in the coming years and numerous projects that have started will lead to installations in 2014 and after. Germany saw steady growth for nearly a decade and clearly represents the most developed PV market, despite the 2013 market downturn. Countries which got a later start – the Czech Republic, Italy, Greece and Belgium – quickly reached high levels, and decreased rapidly afterwards. Next to these leaders, Spain now appears quite low since its market has been constrained. The results for France and the UK still reveal untapped potential in both countries, but with different trajectories. While the French market significantly decreased in 2013, the UK unexpectedly almost doubled its annual installed capacity during that year. Indeed, in 2013, the UK installed more than Italy, becoming together with Germany the main drivers of the European market. — SG
