Market research firm, IHS, has significantly raised its forecast for global PV demand for 2014. Driven by expected demand growth in China and Japan, IHS expects installations to reach 46GW, a 22% increase over 2013.
Leading the growth in demand is China, which IHS said would install 4.8GW of rooftop projects and 8GW of ground-mount projects in 2014. Total installations in China are expected to reach 13GW this year, a 29% increase from its upward revised 10GW in 2013.
“IHS previously expressed its doubts about the Chinese government’s capability to reach an ambitious target of 8GW worth of rooftop solar projects in 2014,” said Ash Sharma, senior director of solar research at IHS. “While IHS still predicts this goal will not be met, China’s recent announcement that it will shift its focus to ground-mount projects and increase its installation target for this segment to 6GW has led us to raise our forecast for 2014.”
Indeed, IHS has previously been sceptical of China’s goal of meeting government targets of around 10GW in 2013, forecasting installations of around 7.5GW. However Chinese officials had said installations had exceeded 10GW late last year, while NPD Solarbuzz estimated installations had reached over 11GW.
IHS was not alone in massively missing the installation growth in China last year; Bloomberg New Energy Finance (BNEF) undertook a complete u-turn earlier this year, conceding that China was expected to beat Japan in PV installations in 2013, forecasting that China had installed around 12GW in 2013.
IHS had last said that demand in China would reach 9.5GW in 2014, dampened by heavy reliance on government targets of 8GW of distributed PV being installed, which IHS did say was not feasible.
The latest global demand revisions by IHS, primarily due to underestimating growth in China for 2013 and 2014, bring them in line with a growing number of forecasts that project 2014 demand to be above 45GW and closer to 50GW.
Another reason IHS said was behind the forecast revisions was the expected increase in demand in Japan. According to the market research firm, installations in Japan are expected to increase by 45% to reach 9GW in 2014, up from 6.3GW project for 2013.
“IHS expects the residential PV market in Japan to decline this year,” Sharma explained. “Although the reduction in Japan’s feed-in-tariff conformed precisely to IHS expectations, other factors will cause the residential market to decline. These factors include the increase in sales tax on domestic PV systems, the expiration of the additional up-front subsidy and the slowdown in new housing construction.”
However, IHS noted that weakness expected in the Japanese residential market would be more than compensated for by the strong commercial rooftop market.
Something all the major market research firms seem to agree on is the continued decline in European markets.
IHS expects that European PV installations in 2014 will fall to 9.7GW, 700MW lower than previously forecasted, marking the third annual decline from the peak year of 2011, when the total amounted to 19GW.
The revision was down to lower expected installations in Germany and also in the Ukraine, as a result of the political uncertainty in Crimea.
“Despite the continued reduction of government support for PV in Europe, worldwide growth is continuing as conditions elsewhere around the globe continue to improve,” Sharma added. “The long-term IHS outlook for worldwide PV installations remains largely unchanged, with double-digit annual growth predicted for the next five years and total installed capacity exceeding 400GW at the end of 2018. IHS has identified 32 countries that will install more than 100MW this year, and seven of these surpassing 1GW.”