Solar, Utility Scale

PV demand grows in Asia Pacific’s top 5

Asia-Pacific photovoltaic markets will grow from about 11% in 2010 to a quarter of total global demand in 2015, according to the latest Asia Pacific Major PV Markets report from Solarbuzz.

July 27, 2011 — Asia-Pacific photovoltaic markets will grow from about 11% in 2010 to a quarter of total global demand in 2015, according to the latest Asia Pacific Major PV Markets report from Solarbuzz. China, Japan, India, Australia, and South Korea (the Asia Pacific’s top 5) will require 3.3GW in 2011, with China and Japan at the top. See 2010’s numbers here.

The top 5 Asia Pacific markets are all undergoing renewable energy policy overhauls. While China, India and Australia are building on-grid markets for the first time, Japan and South Korea face policy transitions that are re-stimulating their domestic demand over the next two years. This may help China, which produces about 50% of the world’s supply of photovoltaics, to become a major consumer as well. China’s market will expand in 2011 by up to 174% over 2010.

China and India each have “multi-gigawatt project pipelines,” noted Craig Stevens, president of Solarbuzz. The challenge? Financing in the somewhat chaotic policy/regulatory environment. If the top 5 make their projected growth, it could “offset the impact of incentive cuts across Europe,” he adds. Utilities will pull ahead of residential installations in these markets.

Figure. Customer segmentation in major Asia-Pacific solar PV markets. SOURCE: Solarbuzz 2011 Asia Pacific Major PV Markets report.

Japan. Japan was the fourth largest PV market in the world in 2010, doubling for a second year in a row and installing 960MW, thanks to re-launch of the nationwide residential incentive program and the net feed-in tariff (FiT). Japan is installing a projected 1.29GW of new PV capacity in 2011. Year-over-year installation growth will hit approximately 35%. Non-residential installations, while not the majority of total capacity, are growing at more than twice the rate of residential system installations. The Fukushima nuclear disaster has led to calls from domestic PV cell manufacturers to push for enhanced renewable energy policies. Meanwhile, the share of imported modules has grown more than 138% Y/Y, accounting for 13% of module shipments in Japan last year.

China. On-grid installations in China are projected to double in 2011 as Chinese incentive policies increase the pace of large and utility-scale PV installations. In 2010, 85% of demand in China was from projects larger than 1MW and the latest temporary on-grid tariff announcement in Qinghai province will further boost shares of ground-mount utility projects in 2011. Programs such as the Golden Sun and Solar Rooftop programs maintain prominence going forward as developers continue to advance projects towards completion. Provincial FIT policies in Jiangsu and Shandong also made significant contributions to overall demand. With improving policy environments at both central and local government levels, as well as a near 10GW project pipeline, the PV market in China is ready to deliver strong growth through 2015.

India. The on-grid ground-mount segment is expected to lead the way in building India’s installed capacity, with installations expected to at least double in 2011. The National Solar Mission, as well as state level policies in Gujarat, Rajasthan, and Maharashtra are leading to strong growth, with these three states accounting for as much as 70% of the total Indian market in 2011. Armed with the goal of installing 22GW of new solar capacity by 2022, the National Solar Mission has sanctioned 300 MW of on-grid PV capacity to be installed through 2011 and 2012, with an additional 300 MW to be allocated in 2H?11. Though the first round of projects has experienced setbacks due to high capital costs, low returns, and regulatory hurdles, a potential restructuring of project guidelines is likely to stimulate higher success rates of future projects. As of June 2011, the on-grid pipeline of projects targeted for completion by 2013 stood at 1.5GW.

South Korea. Although projected to contract in 2011 due to the phase-out of the country?s FIT program, longer-term growth potential in South Korea remains stable as new Renewable Portfolio Standards are implemented. The new RPS is expected to install 1.2GW of new PV capacity over the next five years, although at a much slower pace than in past years. Decreased incentives under the FIT and RPS significantly slowed large ground-mount installations in 2010, paving the way for strong growth in the building-mount segments. This trend is expected to continue over the next few years, as the Korean government seeks to incentivize small and building-mount applications.

Australia. The Australian government?s latest energy policy takes the form of a carbon tax, which will transition to a cap-and-trade system in 2015. The introduction of this policy comes on the heels of several dramatic policy changes, including an increase in the rate of decline for Australia?s main PV incentive program, Solar Credits, and the implosion of several state-based feed-in tariff programs. The 431% market growth in 2010 came despite an attempt by the government to reign in demand for PV installations. The economics of PV systems have been enhanced by decreasing installed system costs, due to falling global module prices, an increasing number of accredited installers, and expectations of increasing retail electricity prices. New South Wales accounted for 44% of the national market, but now faces market disruption following cessation of the Solar Bonus Scheme in April. Fragmented and stop-start solar policies remain the largest stumbling block to long-term sustainable growth for the PV industry in Australia.

The Solarbuzz Asia Pacific Major PV Markets report provides detailed insight into the major Asia Pacific countries active in the PV market, with analysis on Japan, China, India, South Korea and Australia, including market segmentation, government policies, downstream acquisitions, project-by-project listings, investment economics, downstream market pricing and market forecasts. The report also examines data analysis and commercial insight into country specific PV market segments, making this report critical for sales and marketing decision-making for PV companies, equipment manufacturers, materials suppliers and PV systems integrators. Email [email protected] for more information or visit www.solarbuzz.com.

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