Analysts split on Jigar Shah’s 2016 US solar prediction

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Analysts are split on Jigar Shah’s prediction that the US will install more solar power capacity than anyone else in 2016.

The SunEdison founder told PV Tech that with investors won over by solar, he was confident the country would overtake China in the annual installation stakes.

Ash Sharma, senior director, IHS expects China to hold its own but acknowledged that major shifts in both markets are possible.

“In terms of annual (DC) installations we predict the US will install around 9.5GW in 2016, second place behind China,” he said. “Of course China has the ability to surprise and change rapidly, but all indications are that government policy and support will only accelerate deployment in China rather than slow it. As such, I find it hard to see the US displacing China in 2016.

Cuts to the Investment Tax Credit (ITC), which currently offers a 30% boost to the US solar market, could also change the trajectory in the States.

“Perhaps more important, is to look at the impact on the US market post-ITC. In 2016 we predict a spike in demand, as developers rush to complete projects before the ITC falls to 10%. This is likely to cause a significant fall in US installations in 2017 (we expect by as much as 33%) and would see the US fall behind Japan and further behind China,” said Sharma.

Adam James from GTM Research predicts that the reduction in the ITC will spur development in 2016 and nudge the US ahead of China.

“We do expect the US market to be the largest global market in 2016, exceeding China by a razor thin margin,” he said. “There are two aspects of this 2016 story that are indicative of the broader market. First, the global market is still very concentrated in a few key countries, with the US and China accounting for over 50% of the market in 2016. The top five markets will account for 85% of global demand that year.

“Second, the global market is still highly policy-dependent, as those top two markets are being primarily driven by incentives; in the US by developers installing projects ahead of the ITC deadline, and in China from the feed-in-tariffs driving the utility-scale and large commercial and industrial market,” said James.

“In terms of the potential risks in 2016, China certainly has the most volatility, both on the upside and on the downside. 2014 and 2015 will be better indicators for what to expect in 2016, since this will be the first full year with the new [Chinese] incentive programme and there are still some kinks to work out,” he added.

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