PV soaring, but policy roadblocks stymie even faster growth: SPE

The solar sector’s steep growth curve – which could see it closing in on one terawatt of installed capacity by 2021 – could be even sharper if policy-based obstacles to growth are removed, said industry body SolarPower Europe (SPE).

The best-case scenario in SPE’s latest five-year Global Market Outlook would see 935GW of PV in place around the world by the end of 2021, up from 306GW at the end of 2016, although the most likely level is 772GW.

The scenarios form part of an upbeat set of forecasts from SPE, which is confident that the global solar market will continue growing in 2017 with more than 80GW likely to be installed, up from 76.6GW last year.

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Solar passed an important milestone in 2016 when it began beating onshore wind on cost-of-energy, claimed SPE.

“Last year was really the year when solar first became cheaper than wind,” said SPE executive advisor Michael Schmela during an online discussion of the report.

Schmela said PV had dipped below the cost curve of onshore wind thanks to ultra-low prices seen in tenders in the Middle East, including $24.20/MWh achieved in the UAE.

While SPE admitted many such levels were reached in “ideal” conditions, it said they had created a “lighthouse effect” that helped to put downward pressure on prices around the world.

This year in India the price of winning solar bids in tenders is “falling almost weekly”, Schmela said, adding that PV is also bettering costs for new-build nuclear and fossil plants in key markets.

But the SPE executive said that given the spectacular cost “it’s fair to ask why it is not growing even faster. In the end you can say it’s policy, policy, policy”.

Schmela claimed there are “many examples” of policy frameworks where obstacles are placed in the way of solar.

He cited the example of the recent tender in Spain “where solar would have been able to compete on a levelised cost-of-energy basis” but where wind swept the board because the rules of the process were written in the latter’s favour.

Schmela said officials at EU and national level need to provide fair competitive processes underpinned by robust regulatory frameworks and binding targets.

A cross-sector approach that sees renewable power in the wider context of heating and transport is increasingly important, he added.

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