It’s nearing the end of another wild year for the photovoltaic industry and at least publically, spirits remain high and this is despite some current and some upcoming changes.
Utilities in Japan have curtailed grid-connections for large installations (an action that utilities in the US state of Hawaii had already taken), and the upcoming end of Japan’s popular FiT has led to lowered expectations for future growth.
The government in China’s early 2014 focus on rooftop PV proved unworkable due to inappropriate roof construction.
In the U.S. anxiety over upcoming changes to the ITC at the end of 2016 is affecting development of large projects.
Then there is the continued slowing of markets in Europe including uncertainty over the market in the UK going forward.
Potential or very real setbacks aside, the photovoltaic industry has historically experienced growth. Margins and profit may come and go, but at least there has been growth. Figure one presents PV industry capacity, production, shipments and inventory from 2009 through an estimate for 2014.
Figure 1: PV Industry Capacity, Production, Shipments and Inventory
Some points to keep in mind as 2014 nears its end are as follows:
- A project that is sold while in development is not a new project announcement and recounting can lead to oversizing current development activity (while in development projects can and are resold). Also, be clear about the stage of development the project is in.
- Cells and/or modules that are acquired by a traditional manufacturer, Yingli or SunPower for example, should not be counted as shipped by the acquiring manufacturer. For example, a manufacturer with 2.4-GWp of cell capacity and 3-GWp of module assembly can only be given credit for 2.4 (in a perfect world) of shipments, the other 600-MWp came from someone else.
- Grid connections and installations are not synonymous, in fact, grid connections can lag installations by months or even a year (even residential installations can lag, but the problem is more significant with commercial installations). The installation comes first. The grid connection comes later.
And Another Thing…
At Solar Power International when a panel of utilities was asked what the solar industry should expect after 2016, the response was as follows; the solar industry will need to compete with market rates. The U.S. market is expected to experience strong growth in installations through the end of 2016, though the outlook in 2017 and beyond is less clear. Development on new projects has slowed significantly. Development on multi-megawatt (utility scale) projects can take up to two years — and this is before construction begins. It is unlikely that new development will commence until uncertainty over the ITC clears, though construction already underway should continue. The U.S. market for small commercial and residential installations will continue to grow, with the residential application driven by new business models.
The market in China is expected to continue growing strongly in 2014 now that the emphasis on rooftop installations has receded. Japan, despite recent actions by utilities, had strong growth for most of 2014. In 2014, the top markets for PV were China, Japan and the U.S.
Figure 2 offers estimated regional demand shares for 2014.
Figure 2: 2014 Demand Share Estimate 40.8-GWp
2014 the Big Picture
The solar photovoltaic industry continues marching through another year of uncertainty about incentives, concern over the end of incentives as well the viewpoint that it is ready to compete in at market rates with conventional energy.
The problem is that conventional energy remains highly subsidized and so the proverbial playing field is not even. Removing subsidies from conventional energy would immediately level the playing field and render competition less margin reducing. Solar — PV in particular — can compete today unsubsidized with conventional energy technologies but only if conventional energy is forced to play fair.
Lead image: Growth chart via Shutterstock