Rising demand for green projects in investor portfolios is “broadening the geographic base” of the solar market, with 36 nations set to install more than 1GW of solar by 2029.
That is according to the latest report from Fitch Solutions, which forecasts that countries such as Vietnam, Saudi Arabia and Zambia are all set to rapidly growing their operational solar capacities in the coming years. The consultancy estimates that 36 countries will have each added an additional 1GW of solar capacity by 2029, while 70 will add at least 700MW to the global landscape.
A total of 49 markets are expected to at least double their capacity to generate solar power within the next decade, with markets such as Saudi Arabia, Zimbabwe and Zambia predicted to see the fastest growth. This, the report said, will come as a result of more favourable energy policies, falling solar component costs, better access to resources and rising interest from investors. A growing number of developers and financial institutions are competing for access to renewable energy projects, and as a result are “broadening the geographic base” for the solar market. Fitch claims that the number of markets with solar capacities over 1GW will rise from 38 in 2020 to 50 by the end of 2029.
More high-profile investments have been made in nascent solar markets over the past 18 months. In August 2019, The US Trade and Development Agency (USTDA) agreed to finance a feasibility study for a 150MW hybrid solar, wind and battery plant in northern Zambia. More recently, the Kingdom of Saudi Arabia’s Private Investment Fund (PIF) raised its stake in developer ACWA Power from 33.4% to 50%, with a view to growing the country’s interests in renewable energy.
Currently one of the most attractive markets for solar investment, the report said Vietnam is predicted to see a net capacity increase of close to 10GW over the course of the decade. The Vietnamese government offers a variety of financial incentives such as feed-in-tariffs (FiTs) and preferential tax and duty levies to encourage foreign investment in its renewables sector. The country’s Power Development Plan for 2021-2030 is due to be published in March, and it is expected to include a major shift to renewable energy sources in the years to come. It is hoped that renewable energy will make up a 15-20% share of Vietnam’s total energy market by 2030, growing to 25-30% by 2045, under targets set out by Vietnam’s Politburo last February.
Fitch Solutions’ report expects the world’s total solar capacity to more than double between now and the end of 2029, topping 1,4041 GW within a decade. Collectively China, the USA and India will be the “key drivers of this global expansion”, it said, accounting for 730GW of additions.
While emerging markets will play a more significant role in the global solar market over the next decade, most of the growth will come from China, which the report said could make up 40% of the entire sector’s capacity growth by 2029. A separate study published by Bloomberg NEF last week claimed that China’s recent pledge to become carbon neutral by 2060 could see the country reach 4.2TW of solar capacity in 30 years time, requiring US$6.4 trillion of investment. Fitch said China will be “by far the most important market to global solar growth”.
Though far behind China in scale, the USA is expected to drive substantial solar energy growth by 2029. The report said that Joe Biden’s inauguration as President next year will kickstart an expansion that could see the USA’s solar power output grow from an estimated 86.8GW in 2020 to 185.3GW by 2029.