The solar PV market is poised to rise from the ashes of its 2011 crisis to grow to US$155 billion in 2018, according to analysts at Lux Research.
According to the company's latest report latest report Market Size Update 2013: Return to Equilibrium, the recent solar crisis will become a boon, as record low prices boost demand, more than doubling the global market to 61.7GW driven by a healthy 10.5% compound annual growth rate.
Lux Research provides a more long-term view claiming the PV market will rapidly ramp up to 61.7GW in 2018.
“Manufacturers’ nightmare is turning into a long-term boon for the industry. Record low prices pushed gross margins to near zero or below, but they’ve made solar installations competitive in more markets,” said Ed Cahill, Lux Research associate and the lead author of the report.
“Supply and demand will come back into balance in 2015, easing price pressure, returning manufacturers to profitability and restoring the industry to equilibrium.”
Lux Research analysts used a detailed levelised cost of energy analysis in 156 separate geographies, accounting for 82% of the world’s population, to determine the viability and competitiveness of solar in each market.
Analysts also concluded that the US, China, Japan and India will take over where Germany and Italy left off. With an 18% CAGR to 10.8GW of installations in 2018, the United States will emerge the world’s second largest market. But China will leapfrog it, growing over 15% annually to 12.4GW in 2018.
Utility-scale installations are expected to grow the fastest from 8.6GW in 2012 to 19.9GW in 2018. Commercial installations will however make up most of the market as markets like the US and Japan move to large rooftop installations.
Although analysts in general concur that China is becoming a major market, IHS and NPD Solarbuzz are downplaying China’s contribution for this year stating the government’s target of 10GW of installations is too optimistic and believes around 6GW is a more realistic expectation.
On the other hand, IHS is forecasting another year of record installations topping 35GW.