PV growth to slow sharply after strong 2016: IHS Markit

Global PV installation additions will slow to a crawl next year after registering a 34% year-on-year expansion in 2016 – and completing an uninterrupted 10 years of growth, said analyst IHS Markit.

The research group expects the world to end the year with an extra 77GW in place, with strong demand from China driving another bumper year following the 32% year-on-year growth seen in 2015 – the first time this decade that expansion has beaten 30% for two years in a row.

The 2016 growth was stronger than expected thanks to a dash in China to advance projects ahead of feed-in-tariff (FIT) changes announced in September, said IHS Markit.

But the analyst’s forecast for 2017 is for a far more modest new capacity growth of 3%, with 79GW expected to be added, followed by “two years of single-digit growth before a stronger market recovery in 2019”.

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That is due to a slowdown in installations in the world’s two most important PV markets – China and the US.

Josefin Berg, senior analyst, IHS Technology, said: “Until China officially publishes the changes to the FIT rates, and the timeframe for the reductions, the forecast for total installed capacity in 2017 and the quarterly distribution remain highly uncertain.”

IHS Markit pointed out that China has lowered its 2020 minimum solar target to 110GW from 150GW. “This reduced ambition reflects a projected decline in additions of Chinese additions in 2018, followed by relatively flat demand in subsequent years, enough for China to exceed its target and reach 169 GW of cumulative installed capacity in 2020.”

India will become the world’s number-three solar market with a predicted 10GW of additions in 2017, overtaking Japan, added IHS Markit.

“The Indian solar market is rapidly maturing and it is benefiting from low system costs globally,” Berg said.