2014 bodes well for solar PV globally

Solar photovoltaic (PV) uptake appears ready to surge globally in the year 2014. Investment house Deutsche Bank and market research firm NPD Solarbuzz have offered growth forecasts of 46 gigawatts (GW) and 49GW of demand, respectively. According to Deutsche Bank, growth will be led by China, Japan and the United States, which were also the top 3 markets for solar PV in the final quarter of 2013, but Australia will also be along for the ride.

NPD Solarbuzz’s vice president Finlay Colville anticipates that 2014 will prove to be a record-breaking year for the solar industry. “The solar PV industry has reached a critical tipping point, with end-market demand hitting record levels almost every quarter,” he says. In particular, the first quarter of 2014 will see demand rise to unprecedented levels, indicative of the burgeoning growth in countries outside of Europe, which has historically dominated the solar PV market. Quarter 1 coincides with colder, snowier weather in a number of the world’s leading solar countries, which have to date been concentrated in Europe.

The list of countries anticipated to see significant solar PV market growth in 2014 is comprised of those where the cost of generating power from solar panels is lower than purchasing utility power using the ‘levelised cost of energy’ (LCOE) metric. LCOE, roughly speaking, is the total cost of an installed solar PV project, divided by the expected power output over its lifetime. Australia, whose retail electricity prices have risen significantly in recent years, is one of these countries.

Deutsche Bank anticipates that around 1GW of new capacity will be installed in Australia in 2014–comparable to the amount installed in 2012, but more than the estimated 0.85GW installed in the year just ended. This paints a picture of an industry in transition, with the incentive mechanisms that were pivotal in the industry’s growth to date–namely, state-based solar feed-in tariffs–having been been withdrawn across the board. In fact, 2014 will be Australia’s first year without any state-sponsored feed-in tariffs on offer for new solar system owners.

In addition to the arrival of grid price parity in key markets, Deutsche Bank cites a number of other reasons for its optimistic forecasts. These include: the international spread of business models designed in the US for the distributed energy market; the reduction of financing costs & finance availability for the solar sector, which has become more established; increased end-user uptake as solar installation companies increase competition to recruit new customers; and reductions in ‘balance of system’ costs (i.e. all components in a solar system besides solar modules).

© 2014 Solar Choice Pty Ltd

James Martin II

Contributor at Solar Choice
James was Solar Choice's primary writer & researcher between 2010 and 2018.

He is now the communications manager for energy technology startup SwitchDin, but remains an occasional contributor to the Solar Choice blog.

James lives in Newcastle in a house with a weird solar system.
James Martin II