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Further evidence of China’s recovery has already begun, with Canadian Solar – which has a great bulk of its manufacturing facilities located within China – returning to profitability in the third quarter of 2013. “I expect we'll see most of the other big players return to profitability as well by the middle of 2014,” Young said.
“China had a really hard time in 2012 and 2013,” Shah added. “They thought they could bet the entire farm on utility-scale solar projects, but that made no financial sense because it required them to build even more transmission capacity, which was expensive.” Shah said that China’s efforts to make a complete switch-over to distributed generation were mired by the need to establish policies and work in collaboration with utilities, all of which prevented the country’s solar industry from achieving its full potential. “I think you’ll see China get much closer to the 10,000 MW per year target in 2014,” Shah said.
Latin America: A Slow but Steady Rise
If slow and steady wins the race, then Latin America could very well someday soon blossom into a world leader in solar energy. By most accounts, industry growth in 2013 was not explosive – but the region did experience significant added growth that Michael Barker, senior analyst for Solarbuzz, said will continue to pick up steam as 2014 unfolds.
“There are quite a few countries in South America that have projects and developments in various stages,” Barker said. “Chile is obviously very important. There’s a lot of preliminary project activity going on down there, but also some major projects that plan to be installed during the coming year.” Coming in a close second behind Chile as one of the countries most likely to make significant inroads in solar in 2014 is Mexico, which Barker said has several large scale projects underway. “The third major Latin American market to watch is Brazil,” Barker added. “That growth is being driven in large part by localities within Brazil, cities and states that are trying to incentivize solar rather than having it take place at the federal level.”
Mints expects growth to continue in Latin America, but doesn’t predict 2014 will bring any massive gains. “It’s a tender bidding market, and it’s hard to make a buck there,” Mints said. “Right now, we’re seeing a rush to install many projects throughout Latin America. Do I think it’s going to be a multi-gigawatt market? No. Do I see it growing more? Absolutely.”
Other Countries to Watch: India and South Africa
Two other countries to watch in 2014 are India and South Africa. “India had a really tough time in 2013 with internal politics,” Shah said, “but they expect those to largely be solved next year.” Looking to South Africa, which had a particularly exciting 2013 in solar gains, Shah said he expects that market to double in size in the coming year.
“Maintain” Phase to Sweep European Market
Having experienced states of turmoil and decline since early 2012, the European solar market can look forward to continued stabilization, as evidenced by the final quarter of 2013. Shah sees a definite end to Europe’s decline phase and predicts a “maintain phase” throughout 2014. “They’re really looking at going sideways,” Shah said, “which is a good thing. Germany doesn’t need another 7000 MW a year of solar going into their market and disrupting their electricity market. If Germany is able to maintain 4000 MW a year, that’s quite a healthy solar market. The same thing is true for Italy.” Shah also points to acceleration in markets in countries such as the Netherlands, the UK, France and Spain. “I do think that you’ll see an overall flat market in Europe next year,” Shah said, “but that’s really good because they’ve significantly declined in terms of the subsidies that they’re paying out. That’s great for consumers and it shows that the solar market can make the transition from a subsidy-led marketplace to a demand-led marketplace.”
The Global Job Outlook
Shah said 2014 will bring added jobs to the U.S. solar industry as players look to train and prepare employees to meet the demand of increased volume. “I think you’re going to see a significant ramping up in the number of people who get hired into the solar industry next year in the United States,” he said. Mints also sees increased employment throughout Europe, China and Japan. “We are in an era where jobs are unfolding,” Mints said, pointing also to the creation of indirect ancillary jobs that are frequently overlooked – such as growth in service industry jobs in locations that are directly impacted by the development of new solar projects. “Those are solar jobs too, in an indirect way,” Mints said.
A Year of Consolidation
Most are of the shared opinion that 2014 will be a year of consolidation. “I think the solar business is still relatively immature,” Feo said, “so it has a number of cycles yet to go through. That doesn’t necessarily mean that all of the small businesses in the space are in trouble – I just think it means that those in solar have to determine what it is they do especially well and stay focused on that.”
Shah believes 2014 will draw a “deep line of demarcation between the haves and the have-nots” in that downstream installers who are unable to provide low cost systems will find themselves out of business. “I think the days of subsidizing high-cost installers will come to an abrupt end next year,” he said, tempering this prediction by adding that few employees will experience long term unemployment as a result: “They’ll be hired into other companies. That’s good news for employees and it’s good news for all of us – including governments that are paying subsidies. It’s also good for the solar industry at large, because you’re going to have much more professional business people running the companies. Ultimately that’s also great news for consumers.”
Lead image: Blue sky reflected in solar panels via Shutterstock
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