- Mercom Capital Group revised its global solar market growth forecast to 66.7 GW, 3% up from 64.7 GW it gave last year
- China is expected to add 18.5 GW, after it achieved 7.1 GW in Q1/2016
- US estimated to add 13.5 GW as developers prefer to not push for project completion
- Mercom sees Indian market to grow 'only' 4 GW in 2016
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India Solar Market LeaderBoard 2019 Places ACME Solar On Top Among Utility Scale Project Developers By Installed Capacity In 2018, As China’s ZnShine Emerges As Top Solar Module Supplier To Indian Market Last Year: Mercom
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The world will install 66.7 GW of solar power capacity with China, the US, Japan and India taking the lead, believes Mercom Capital Group. This figure means a 3.09% increase over the consultancy’s prior guidance for 2016 announced in December 2015. “Solar installations are forecasted to grow year-over-year globally despite recent headwinds in the sector with solar stocks, yieldcos, bankruptcies and the negative perception surrounding solar public companies,” says Mercom CEO and Co-founder Raj Prabhu.
Despite the upward adjustment, Mercom’s guidance is still lower than the 69 GW IHS predicted in March (see 69 GW of solar PV addition in 2016).
Mercom provides details on demand in leading countries – and is usually a bit more conservative than its peers. However, all agree that most of the growth will take place in 4 countries in 2016.
China on top with 18.5 GW
The Asian giant recently announced 7.1 GW of new solar installations in the first quarter (see China Q1/2016 PV Capacity). From here, Mercom expects that China will scale up the number to 18.5 GW by year-end. This growth is expected despite the country reducing its FiT by up to 11% regionwis. The report states, “To address the subsidy payment issues and raise additional revenue, the renewable energy surcharge has been increased by 27 percent, and an on-grid power tariff for commercial and industrial customers has been reduced to tackle shortages in the renewable energy fund.” The Chinese government, however, had said it targets only 15 GW of new installation this year (see China Plans 15 GW New Solar in 2016).
US solar growth affected by ITC extension
According to Mercom, the US will add 13.5 GW of solar to the tally as developers are not in a hurry to complete their projects, thanks to the extension of investment tax credit (ITC) in December 2015. The developers would their time to negotiate better deals with their suppliers. That would means a slow first quarter, but the pace will pick up in the second half of the year, says Mercom. However, other consultancies are more optimistic on US solar – anticipating 15 GW (IHS) to 16 (GTM Research) of new capacity.
Japan to add 10.5 GW
Third on the list of the top four solar nations, Japan is aiming for a total number of 28 GW of solar by 2020. This year Mercom puts the number at 10.5 GW for Japan. Compared to the forecast of 13.2 to 14.3 GW offered by Bloomberg New Energy Finance (BNEF), the Mercom analyses appears conservative. But, Mercom basis its analyses on several factors, including a reduced FiT, issues of grid connection, curtailment and an undeveloped pipeline.
Only 4 GW for India
It is difficult to compare the 4 GW additions Mercom estimates for India with other recent forecasts, which do not refer to the calendar but the fiscal year. While credit rating agency ICRA expects 5.7 GW (see ICRA estimates 5.7 GW of solar by 2017 in India), Bridge to India predicts 5.4 GW for the fiscal year, which ends in March 2017 (see India Solar Handbook 2016). In any case, the number is much lower than the 12 GW, the Indian government plans to install this fiscal year. The reason for Mercom’s conservative number for India is the aggressive bidding in solar capacity auctions, which have put a question mark on the viability of projects.