Solarbuzz report expects Asia-Pacific PV markets to account for 25% of global demand by 2015

Sep 8, 2011 - Syanne Olson - pv-tech.org

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  The Asia-Pacific region
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  Customer segmentation in major Asia-Pacific markets

In the new “Asia Pacific Major PV Markets” published by Solarbuzz, the expectation has been set for the Asia-Pacific solar markets to experience significant growth over the next four years. According to Solarbuzz, this market segment is anticipated to make up 25% of global PV demand by 2015, compared to the 11% it represented in 2010.  The top five markets, China, Japan, India Australia and South Korea, will more than likely account for 3.3GW of demand in 2011 alone, with China and Japan leading the region. Growth, in terms of customer segments is anticipated to be guided by utilities, which Solarbuzz speculates will become the largest customer segment as the Asia-Pacific markets leave the prevailing residential installation model. 

The report cites major policy structure changes in the Asia-Pacific market that will contribute to the hypothesized growth. China, India and Australia are building on-grid markets, Japan and South Korea are going through policy changes that are set to revitalize their domestic demand over the next two years and China, which is home to a manufacturing base that makes up around 50% of global production, is energizing its domestic demand through national and provincial programs. This is expected to lead China’s 2011 market expansion to reach 174% of its 2010 level.

According to the report, Japan’s solar PV market is likely to install at least 1.29GW of new PV capacity in 2011 with the help of a nationwide net FiT program. The projection represents 35% growth, which Solarbuzz contrasts against the low-growth/ narrowing European markets in 2011. While Japan’s non-residential installations do not account for the bulk of total capacity, this segment is growing at over twice the rate of residential installations. Solarbuzz maintains that Japan was the fourth largest PV market in the world in 2010 with the installation of 960MW and pointed to the tsunami and related Fukushima nuclear crisis leading domestic cell manufactures to push for better renewable energy policies. Japan’s imported module segment has risen to over 138% on a year-over-year basis, comprising 13% of the module shipments in Japan last year.

China’s market continues to blaze the trail with on-grid installations expected to double in 2011 due to incentive policies increasing the speed of large- and utility-scale PV installations. The report noted that in 2010, 85% of demand in China was for projects over 1MW. Current temporary on-grid tariff announcements in the Qinghai province are anticipated to promote shares of ground-mounted utility projects in 2011. As developers continue to bring PV projects to completion, China’s Golden Sun and Solar Rooftop programs continue to remain important, while the Jiangsu and Shandong province FiT policies have added to the overall demand. Solarbuzz highlighted China’s 10GW project pipeline and improving policy environments on a central and local level with keeping China’s PV market set to prosper through 2015.

India’s installed capacity is expected to thrive with its on-grid ground-mount segment anticipated to at least double in 2011. The country’s National Solar Mission and state level policies in Gujarat, Rajasthan and Maharashtra are cited by Solarbuzz as leading the country to solid growth; the three states are projected to make up nearly 70% of the total Indian market in 2011. As the National Solar Mission continues pushing towards its 22GW installed capacity by 2022 goal, 300MW of on-grid PV capacity has been sanctioned for installation through 2011 and 2012, with an added 300MW allocated for the second half of 2011. Solarbuzz conceded that the first round of projects have run into obstacles due to high capital costs, low returns and regulatory hurdles, but as project guidelines hold a potential to be reformed, a better success rate is expected to follow.

South Korea is bracing for a potential downturn in growth during 2011 as the country begins to phase-out its FiT programs, but the Solarbuzz report still projects long-term growth potential for the country with new Renewable Portfolio Standards (RPS) carried out. The new RPS is predicted to install 1.2GW of new PV capacity over the next five years, but at a slower pace than in the past. Contracted incentives under the FiT and RPS decelerated large ground-mount installations in 2010, but led to the path being set for sturdy growth in the building-mount segments. Solarbuzz advised that this is expected to continue over the next few years as the country’s government looks to incentivize small and building-mount applications.

Over the past few weeks, the Australian government has instated various policy changes, which included an increase in the rate of decline for the country’s main PV incentive program, Solar Credits and the disintegration of many state-based FiT programs. Most recently, the Australian government has adopted an energy policy in the form of a carbon tax, which will evolve into a cap-and-trade system in 2015. Solarbuzz noted 431% market growth in 2010, in the face of the government’s attempt to influence the demand for PV installations and, on the flip side, the financial portion of PV systems has been boosted by a drop in installed system costs, which can be credited to globally reduced modules prices, an increased number of accredited installers and the anticipation of higher retail electricity prices. Solarbuzz concluded that uneven and stop-start policies would remain the largest obstacle for Australia’s sustainable long-term PV market growth.

“Market growth expectations are high for the region, China and India in particular, as they each have multi-gigawatt project pipelines. However, the largest challenge facing many of these projects is the need to secure financing amidst a still evolving policy and regulatory environment,” said Craig Stevens, president of Solarbuzz. “If these policies are successful in delivering the projected growth for the Asia-Pacific region, it will help offset the impact of incentive cuts across Europe.”