22 Sep 2015
Mercom Capital Group, llc, a global clean energy communications and consulting firm, is reiterating its global forecast of 57.4 GW in solar installations for 2015, a growth of about 25-30 percent in 2015 compared to last year.
“Despite deteriorating macro-economic conditions in China and the recent downtrend in solar stocks, the market is on pace to reach about 57 GW this year,” said Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.
Since Mercom’s last quarterly update, China released its first half installation numbers, which showed 7.73 GW of installed PV, much higher than the 3 GW installed last year during the same time period. About 2.5 to 3 GW of those projects are estimated to have been carried over from 2014. This is a good sign, as Chinese installations are forecasted to account for 30 percent of global solar installations in 2015. However, macro-economic conditions have changed drastically in China over the past three months even though we have not seen an effect on the solar market directly. Overall, strong demand has been reported for the second half of this year giving us confidence that China could install 17 GW this year. However, curtailment and delayed tariff payments could be a negative factor. Chinese solar associations, meanwhile, are proposing an increase in national solar installation goals from 100 GW to 200 GW.
Japan’s solar market is set to install about 9.5 GW in 2015 and is expected to decline thereafter. According to the Japan Photovoltaic Energy Association (JPEA), domestic solar module shipments in the first quarter (FY 2015) fell sharply by 41 percent quarter-over-quarter (QoQ) and about 14 percent compared to the same quarter last year, after the first cut in the feed-in tariff (FiT). Japan has cut its solar FiT by a total of 15.6 percent in two phases this year. It has also restarted its first nuclear reactor since the Fukushima disaster, with other reactors expected to come online.
Mercom is forecasting U.S. installations to reach 8.5 GW in 2015. With a strong pipeline of projects, the U.S. market is headed for a robust 15 months of installations before the Investment Tax Credit (ITC) drops from 30 percent to 10 percent at the end of 2016. The equity market has been challenging for solar companies including yieldcos over the past three months and could have some impact on fundraising in the near future. Most companies are currently evaluating their business models and planning for a post ITC world. We also expect consolidation activity to pick up.
In Europe, the U.K. solar market is poised to peak this year reaching 3 GW as solar incentives start to disappear. The U.K. government has announced a drastic reduction of FiTs by 67-87 percent and is proposing to remove preliminary accreditation under the FiT scheme, which will make it difficult for the solar sector to grow after 2015. Germany will only install about 1.3 GW in 2015, a 32 percent decrease over last year, making it one of the worst years for solar installations in the country.
After a long wait, the solar market in India is finally taking off. Solar installations have been stuck at the gigawatt level for the last three years but India will become one of the top five markets for solar this year with installations forecasted at 2.5 GW. Solar installations as of August this year have reached approximately 1,400 MW, already the best year so far for India.
Mercom Capital Group, llc