Mercom Capital Group, llc, a global clean energy communications and consulting firm, is reiterating its global forecast of 57.4GW in solar installations for 2015, a growth of about 25 to 30% in 2015 compared to last year.
Since Mercom’s last quarterly update, China released its first half installation numbers, which showed 7.73GW of installed PV, much higher than the 3GW installed last year during the same time period. About 2.5 to 3GW of those projects are estimated to have been carried over from 2014. This is a good sign, as Chinese installations are forecasted to account for 30% of global solar installations in 2015. However, macro-economic conditions have changed drastically in China over the past three months even though we have not seen an effect on the solar market directly. Overall, strong demand has been reported for the second half of this year giving us confidence that China could install 17GW this year. However, curtailment and delayed tariff payments could be a negative factor. Chinese solar associations, meanwhile, are proposing an increase in national solar installation goals from 100GW to 200GW.
Japan’s solar market is set to install about 9.5GW in 2015 and is expected to decline thereafter. According to the Japan Photovoltaic Energy Association (JPEA), domestic solar module shipments in the first quarter (FY 2015) fell sharply by 41% quarter-over-quarter (QoQ) and about 14% compared to the same quarter last year, after the first cut in the feed-in tariff (FiT). Japan has cut its solar FiT by a total of 15.6% in two phases this year. It has also restarted its first nuclear reactor since the Fukushima disaster, with other reactors expected to come online.
Mercom is forecasting US installations to reach 8.5GW in 2015. With a strong pipeline of projects, the US market is headed for a robust 15 months of installations before the Investment Tax Credit (ITC) drops from 30% to 10% at the end of 2016. The equity market has been challenging for solar companies including yieldcos over the past three months and could have some impact on fundraising in the near future. Most companies are currently evaluating their business models and planning for a post ITC world. We also expect consolidation activity to pick up.
In Europe, the UK solar market is poised to peak this year reaching 3GW as solar incentives start to disappear. The UK government has announced a drastic reduction of FiTs by 67-87 percent and is proposing to remove preliminary accreditation under the FiT scheme, which will make it difficult for the solar sector to grow after 2015. Germany will only install about 1.3 W in 2015, a 32% decrease over last year, making it one of the worst years for solar installations in the country.
After a long wait, the solar market in India is finally taking off. Solar installations have been stuck at the gigawatt level for the last three years but India will become one of the top five markets for solar this year with installations forecasted at 2.5GW. Solar installations as of August this year have reached approximately 1,400 MW, already the best year so far for India.