100GW PV market in 2018: Solarbuzz

The world will add 300GW of PV capacity between calendar years 2014-2018, equivalent to an annual market of 60GW, predicts NPD Solarbuzz.

Of that 300GW, more than half will go up in China, Japan and the US alone.

Solarbuzz is among the most bullish PV market researchers, forecasting just under 50GW of new capacity this year – and 100GW in the year 2018.

By comparison, the world added a record 37GW of PV capacity in 2013, ending the year with a cumulative 136.7GW, according to the European Photovoltaic Industry Association.

“These numbers might seem large, but even in the demand-constrained environment [we’ve seen in recent years] the solar industry has completely outperformed most people’s expectations,” said Solarbuzz vice president Finlay Colville in a conference call today.

The forces governing the global PV market are changing rapidly. Given the high cost of PV in the past, demand – itself largely a function of the subsidies on offer – has normally dictated the global market.

That has led to the violent shakeout of manufacturers seen over the past few years, as many important markets were closed or choked off by subsidy-weary governments.

But the picture is transforming rapidly as solar energy surges towards grid parity in many markets.

Over the next few years the global market will be “supply driven”, Solarbuzz claims, meaning that the market for modules will be largely governed by how much product is available.

Crucially, the global PV industry is moving into a period of healthier supply-demand balance, with a number of major PV manufacturers returning to profitability in 2013.

The global supply-chain still had more “effective production capacity” than it needed in 2013. But the industry will this year move into a phase where supply and demand are “largely balanced”, Colville claims.

“How long that lasts, I’m not sure,” he says. “But 2014-16 is probably going to be a period of stability.”

Even when the industry does return to an oversupply situation, the impact will be significantly more muted than it has been over the past few years.

Colville notes that it was far easier for a few new gigawatt-plus factories to totally upend the supply-demand balance a few years ago – when global production capacity stood at only a few dozen gigawatts – than it would be today, with some 50GW of capacity on line.

“The scope for these massive price declines is different than it was a few years ago,” he says.

While there is every reason to believe that module prices will continue to fall, the declines will in future be “a lot more predictable and gradual – and they won’t hurt as much”.