Playing Catch-Up: Emerging Markets Outpacing Developed Regions

Recent findings in two NPD Solarbuzz reports, covering the Middle East & Africa and Emerging Asia-Pacific & Central Asia, indicate that both of these areas are set for considerable growth in 2013 with annual demand projected to hit 1 GW in each region.

Find the reports here: Middle East & Africa and Emerging Asia-Pacific & Central Asia.

While this represents tremendous growth, especially compared to softer growth in European markets, these emerging regions still have some way to go to catch-up annual demand volumes and match legacy markets in terms of driving global PV demand.

However, this process is beginning to occur as higher growth rates in emerging regions are rapidly closing the demand-share gap with legacy markets. The figure shows comparative Y/Y annual growth rates between the Western/Japanese (W/J) markets (with the Western grouping encompassing Europe, the US, and Canada) and the Emerging markets (all other global markets). While some of the countries included in Emerging in this analysis are now major drivers of end-market demand (for example, China and India) it has only been in the last few years that these countries have begun to rival legacy markets such as Germany, Japan, and the US.

This is highlighted via the market share data presented, which clearly shows that up until 2011, the W/J grouping accounted for over 90 percent of global demand every year. This was because during the 2007-2011 period, global end-market demand was growing by strong double-digits globally. Therefore, developed markets maintained their dominance in terms of driving demand. 2011 was the year this began to change as policy changes — particularly in Europe — slowed growth in the overall W/J region while lower prices and positive policy environments in the Emerging region (in this case driven by China) caused Y/Y growth rates to rise to almost 300 percent and emerging regions began to gain demand share.

As presented in the new NPD Solarbuzz Marketbuzz report, global Y/Y growth in 2012 fell to single-digits as stronger growth in Emerging regions could not compensate for the annual demand decline in the W/J grouping during the year. While legacy markets overall are still expected to decrease in 2013 — primarily a result of European declines — global growth is anticipated to increase as Emerging market growth increases. In the long-term, a return to double-digit growth rates is anticipated for both major groupings as low installed system prices are driving end-market expansion in new regions and making PV installations attractive in legacy markets even with policy reductions.

Figure 1: Emerging v. Developed Markets Comparative Growth/Share

Source: Adapted from NPD Solarbuzz Marketbuzz

This article was originally published on Solarbuzz and was republished with permission.

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Michael Barker monitors the status of the global PV industry supply/demand balance and watches related emerging trends. His responsibilities include the Solarbuzz Quarterly and Marketbuzz reports. Barker is also a regular contributor to leading PV industry publications and participates frequently in major PV conferences as a keynote speaker or session moderator. Before joining Solarbuzz, Barker led a team in writing and presenting business plans for SolNano, a company focused on bringing proprietary nano-scale solar PV technology to market. During that time, Barker also lectured at the University of Idaho College of Business and Economics, and conducted innovative research covering waste-to-energy systems in Guatemala for the Martin Institute at the University of Idaho. Barker has a BS in Business Economics and a minor in International Business from the University of Idaho.

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