Despite the uncertainty and volatile pricing dynamics in the global solar industry, demand for solar photovoltaic (PV) continued to grow in 2018, and annual installations reached the long-awaited milestone of 100 gigawatts (GW). This is a figure that seemed unattainable in 2007, when annual installations had just tipped the 2 GW mark, according to IHS Markit.
“As solar becomes increasingly competitive with conventional sources of power generation, companies are investing in the renewables industry, as never before, attracted by the growing revenue opportunities and the pressure to increase sustainability,” said Edurne Zoco, research director, solar and energy storage, IHS Markit. “Solar and other renewables are also playing a key role in the decentralization and digitalization of the power system, or the so-called ‘energy transition’, which is now on the agendas of many governments, companies and other institutions.”
“Predictions for the PV industry in 2019,” a new white paper from IHS Markit, identifies the following eight significant trends that will drive the market this year:
- Global PV installations will return to double-digit growth with record volumes to be installed in the fourth quarter of 2019. This year will be the first year since 2011 that annual PV installations will grow in all six global regions. Europe, the Middle East, North America, South and Central America, Africa and Asia-Pacific will all contribute to 18 percent year-on-year growth.
- European PV demand will return to 2012 levels as corporate PPAs play a growing role. Europe will continue to reclaim ground as a PV market in 2019. In fact, 18 GW will be installed across the region, a milestone that has not been achieved since 2012. The increasingly attractive economics of PV are helping to reignite markets, aided by growing opportunities to sign private purchase power agreements (PPAs).
- Revamping and repowering of PV plants will grow in importance, as the installed base in Europe ages. At the start of 2019, more than 40 GW of PV systems in Europe larger than 100 kilowatts (kW) were more than six years old. Technology costs have fallen dramatically since these installations were completed, so upgrading older PV plants to improve their yield and return on investment is becoming more commonplace.
- China’s policy decisions will continue to define global dynamics, as it drives its domestic market toward grid-parity projects. With China accounting for an estimated 65 percent of PV module production in 2018 and 41 percent of global installations, the country clearly dictates the supply-and-demand balance of the industry. This trend will be more pronounced than ever in 2019, as the industry awaits confirmation of anticipated changes to the country’s incentive policies.
- More than 500 megawatt hours (MWh) of batteries will be deployed in utility-scale solar plants in North America. The combination of intermittent renewables and batteries has long been considered the key to providing scalable, dispatchable, clean power. In 2019, the first meaningful volumes of these systems will be installed, with the action primarily focused on North America.
- Diversification of PV inverter suppliers will continue, as they continue to battle stagnating revenues. PV inverter suppliers will continue to expand into a diverse range of adjacent industries as price pressure and intense competition persists.
- The race for the 400-Watt (W) PV module will heat up as high efficiency products gain share in the market. Solar PV has become a highly competitive energy source, as the average price of a solar panel has fallen by over 80 percent in the last decade. However, these cost improvements have been aided by ongoing improvements in cell and module efficiencies, which have increased by approximately 25 percent during the same period.
- There will be 11 million new connections to the Internet of Energy from solar systems in 2019. Digitalization of the grid continues to be a megatrend for the power sector and in the solar industry. IHS Markit forecasts an average of 30 thousand new PV inverters will be shipped each day in 2019 or 11 million for the full year.