Five years of predicted global growth in PV installations will offset Europe's decline as the world’s once-leading solar region, according to the European Photovoltaic Industry Association.
Presenting its forward looking forecast for the first time at Intersolar Europe, European PV industry association, EPIA guided continued strong growth for the PV industry through to 2018.
But EPIA’s ‘Global Market Outlook for Photovoltaics 2014-2018’ report highlights Europe’s demise as the global PV engine-room and predicts it will only manage half the annual installations in the second half of this decade that it achieved when it hit its peak in 2011.
Oliver Schafer, newly appointed president of EPIA called it an “exiting year for the [PV] industry,” after global demand topped 38.4GW in 2013 and set for at least 43GW in EPIA’s ‘median’ forecast.
However, EPIA also guided a ‘high scenario’ case that could see global PV demand hit 52GW in 2014. Historically, EPIA has been highly conservative in its demand forecasts but the 2014 high case projection tops the most bullish (50GW) forecast from market research firm, NPD Solarbuzz.
Schafer told PV Tech that the 2014 median forecast was very conservative and unlikely to be near actual installations figures, while somewhere near the high case scenario was looking increasingly likely.
Despite EPIA being bullish on the PV market in 2014, the trade association forecasted almost flat growth in both its ‘median’ and ‘high’ scenarios for 2015, projected at around 45GW and 53GW respectively.
Stronger growth was forecasted in 2016 with demand reaching a potential high of 56GW and a median figure of around 46GW. Stronger growth was forecasted in 2017 with the median figure of around 50GW and a high figure of 62GW.
In 2018, PV demand could reach around 53GW in the median forecast and top 69GW in the high case scenario.
Schäfer noted that the PV industry had entered a new phase as true globalisation had occurred, freeing the industry of dependence on a single market (Europe) and in particular Germany.
According to EPIA, more than 27GW of new installations occurred outside Europe in 2013, compared to only 13.9GW in 2012.
Not surprisingly, EPIA noted that China, Japan and the US were major markets in 2013 and expected these markets to remain strong over the next few years.
According to Schäfer, “PV is not a niche player anymore” in the energy markets, rather it has become a “serious player and needs to act in a different way.”
The EPIA president noted a shift in thinking for the trade association, noting that the industry needs to align with all renewable energy sources as well as the gas sector to provide a unified path to an acceptable and realistic low-carbon future.
Schafer said that he saw no reason why PV could not be responsible for around 35% of Europe’s future energy requirements in tandem with the same penetration levels for wind and gas. To achieve this goal the energy market in Europe would need to change and become a better fit for renewables, something Schafer said EPIA would lead in pushing within the EU with support from chosen renewable energy/technology sectors.
Overall, EPIA said Europe’s decline was a consequence of policy instability leading to cycles of boom and bust, in which markets rapidly grow then crash as politicians take action to prevent overheating.
The report points out that countries that have gone through boom-bust cycles have been unable to restore pre-bust levels of confidence among investors.
“On the contrary, policymakers seem to have ensured that in these countries PV would not be allowed to reach the same market levels reached previously. This was the case in Spain, Czech Republic, Slovakia, Bulgaria, and most probably in Belgium and Italy,” the report said.
“The number of markets in Europe where PV hasn’t developed yet remains limited and considering past experience, a further overall market decline could emerge if particular countries replicate the pattern of boom and bust seen elsewhere in Europe.”
According to EPIA’s most likely scenario for Europe, installations will bottom out at around 8-9GW in 2014, their lowest since 2009, before rising to around 10-12GW over the second part of the decade.
“Europe's situation at the end of last year shows that PV, as any other energy business, remains policy-driven,” said Schäfer.
“A series of retrospective measures were implemented in the last years in various European countries, leading to the sharp market decrease observed in 2013. Sustainable, predictable and dynamic framework conditions and policies are needed in Europe and globally to provide enough visibility to investors.”
However, despite PV’s ongoing decline in Europe, it was among the two most installed energy sources in the EU, after wind, and now covers 3% of the electricity demand and 6% of the peak electricity demand in Europe.
And the report highlighted PV’s rapid growth in other parts of the world, with this trend expected to continue for the foreseeable future, further cementing PV’s global presence.
By 2018 EPIA said cumulative global PV installations could more than triple from today's level to reach around 400GW.
“PV is becoming a major part of the electricity system all over the globe, changing the way our world is powered. Policymakers and energy stakeholders should now understand that electricity grids and markets need to be adapted to fit these new realities and facilitate a cost-efficient energy transition,” Schäfer said.
Additional reporting by Mark Osborne.