Global FPV Market Developments

• Floating photovoltaics capacity has surged from 20 kW in 2007 to over 4.3 GW by 2022, indicating robust growth and scalability in the sector
• The APAC region holds 87% of global FPV capacity, with China leading at 1.76 GW, followed by India, Taiwan, and Thailand as key players
• FPV has vast potential, with estimates suggesting 9.4 PWh annual generation possible by covering 30% of global reservoirs, and projected growth to 60 GW by 2030.

It took a while but now Floating Photovoltaic Systems (FPV) is on a clear commercialization path. After the first 20 kW FPV system was installed in 2007, it took 7 years until 2014 to reach the 10 MW level, 4 years before the1 GW mark was surpassed in 2018, and another 3 years to triple the installed capacity to over 3 GW by 2021. According to Jason Sheridan, Senior Research Analyst at S&P Global, who provided a detailed FPV market overview in a Floating Solar Session at Intersolar Europe Conference in June2023, the cumulative installed capacity of FPV systems was 4.3 GW by the end of 2022. APAC was the predominant FPV region operating approximately 87% of the global floating solar capacity. Several APAC countries have played a pivotal role in the growth of the floating solar market – with China, India, Taiwan and Thailand emerging as key players, which are also 4 of the top 5 markets for FPV.

Like everywhere in PV, China also stands out as the major FPV player, with significant installations contributing to APAC's dominance. By the end of 2022, China's floating solar capacity reached1.76 GW, representing 41% of the worldwide total capacity, followed by India at 14%, Taiwan 10% and Thailand 4%. In response to its goal of achieving carbon peak by 2030 and net zero by 2060, China has launched dozens of GW-scale offshore PV projects. Shandong province, for example, has formulated a plan for 40 GW of offshore PV projects, including 2 GW of FPV. Shandong has also decided to provide subsidies for FPV projects, with approximately US$0.14/W in the first year, decreasing year by year thereafter, which has contributed to a very attractive IRR of 6% to 7%,higher than most onshore utility PV plants (see Key Technologies And Market Leaders In FPV).

The FPV market grew significantly in the past few years. Developed fully in Asia, the share of other markets has been increasing but remains miniscule. End of 2022, 87% of all operating FPV plants were operated in Asia. (Source: S&P Global)

An important trend according to Sheridan is that, though modest, the FPV segment has started growing notably out of the APAC region, particularly in 2022. Europe, MEA and Americas collectively represent 13% of the market. When it comes to Europe, floating installations shot up from 10 MW in2017 to 270 MW by 2022. However, with 215 MW of FPV systems installed, the Netherlands not only takes the lion's share at 76% of the total, but it is also the only European player that is in the global league of top 5. The country has also announced an ambitious target for offshore floating PV of 3 GW by 2030. France, Portugal and Italy are the other promising markets of the European continent for FPV.

Another important change that has been more prominent from 2022 has been that FPV is attracting leading European PV developers, resulting in increased activity with the technology, according to Sheridan. The MEA and Americas regions combined represent 7% of installed capacity, both showing an impressive growth from 2021 to 2022. Backed by the Inflation Reduction ACT (IRA), FPV in the United States is expected to grow significantly, especially on the East Coast. In June 2023, an 8.9 MW FPV plant, the largest in the US so far, was put into operation.

FPV medium-term growth estimate and potential

Although FPV only accounts for a very small share of today's PV market, which is expected to stay relatively unchanged in the medium term, it offers huge long-term potential – and will continue to grow notably. According to Sheridan, installed FPV capacity will increase from around 4 GW in 2022 to about 15 GW in 2026 and 30 GW by end of 2030. While APAC will continue to drive FPV's growth, seeing a market share of 80%, other regions will also see augmented activity.

Looking at the big picture of FPV, a World Bank & SERIS report from 2018, Where Sun Meets Water, pegs the technology's theoretical potential at 400 GW, with 1% coverage of man-made water reservoirs used; and over 4 TW if 10% were used. While in the meantime different assumptions and numbers have been published, a March 2023 joint publication in Nature Sustainability by research institutes from Asia, America and Europe estimates that the practical potential electricity generation for FPV systems on reservoirs is around 9.4 PWh per year, assuming a 30% coverage of global reservoirs, and at 4 PWh per year even when lowering the coverage to 10%.

At the Intersolar Europe Conference 2023, S&P forecasted global FPV installed capacity to grow from 4.3 GW end of 2022 to nearly 30 GW by 2030. (Source: S&P Global)

In January 2024, Chinese researchers published an Assessment of Floating Solar Photovoltaic Potential in China, estimating that installed FPV capacity in the country could reach between 705 GW and 863GW on water reservoirs (excluding natural lakes) generating annual power output of 1.16 to 1.42PWh, which would result in annual reduction of water evaporation of 5.8 km3 while 7,117 km2 of land would not be needed for solar system deployments. According to this research, "most potential FPV stations can obtain financial positive returns." However, when taking into consideration the offshore opportunities, the potential is obviously much larger. Back to today's reality, SolarPower Europe points in its recently published first Floating PV Best Practice Guidelines to an IEA-PVPS report that forecasts around 60 GW of total installed FPV capacity by2030, which, as the solar lobby organization says, "highlights the need to strengthen policy and market support for floating solar if its true potential is to be harnessed."

The text is an excerpt from the TaiyangNews Floating PV 2024 Report, which can be downloaded for free here.