New Jersey (USA), Portugal, Australian, Italy, and India were the top 5 locations for solar power by IRR in Q2 2011, according to Lux Research’s Solar Demand Forecaster. Market stability and visibility in solar incentive programs are encouraging returns in these markets.
September 6, 2011 — New Jersey (USA), Portugal, Australian, Italy, and India were the top 5 locations for solar power by IRR in Q2 2011, according to Lux Research’s Solar Demand Forecaster. Market stability and visibility in solar incentive programs are encouraging returns in these markets.
|Top 5 locations by IRR (2Q11):|
|1. New Jersey
Portugal’s solar market is one of the hottest for investors through 2013, thanks to steadily rising internal rates of returns (IRR) for the six major solar technologies bringing Portugal to a nearly 400MW annual market in 2016. Portugal doesn’t suffer from the same “uncertainty surrounding incentives” that restrains other European markets with high solar potential and favorable IRRs for investors, said Matt Feinstein, the Lux Research analyst who led the Demand Forecast. Feinstein points out that Italy and Germany remain “stable markets with returns hovering near 9% and 22% through 2016, respectively.”
High solar renewable energy credit (SREC) prices brought New Jersey to the top of the IRR charts in Q2 2011: IRRs were in the 40% range in 2010 and early 2011. Oversupply is currently threatening NJ’s solar prices, with no floor in place. The US flagship market, California, will continue to see steady growth with step-down incentives and recent Renewable Portfolio Standards (RPS) legislation.
India made the top 5 IRR locations, with quarterly IRRs skyrocketing past 20% thanks to the newly introduced National Solar Mission. India could become one of the strongest demand markets through 2016 if subsidies are extended past 2013, as expected.
IRR is the discount rate at which the net present value (NPV) of future cash flows from a capital investment equals zero. Capital expenditure is the primary factor in determining a market’s IRR, along with incentives and operating expenses.
Lux Research’s Solar Demand Forecaster provides a customizable platform for tracking IRR and projecting future growth through 2016 for the six key photovoltaic technologies: monocrystalline silicon (c-Si), multicrystalline silicon (mc-Si), cadmium telluride (CdTe), copper indium gallium diselenide (CIGS), thin film silicon (TF-Si), and high concentrating photovoltaic modules (HCPV). It provides breakdowns for IRRs for residential, commercial and utility installations in 50 US states, 31 Chinese provinces and semi-autonomous regions, and 75 countries/regions globally. Lux Research provides strategic advice and on-going intelligence for emerging technologies. Visit www.luxresearchinc.com for more information.