Solar PV installations across Asia: Key trends

The Asia-Pacific region, led by China, is growing its PV installations and pipeline. This NPD Solarbuzz report shows the install rates for major countries in the region, incentives’ effects, trends in solar installation types (commercial, utility, residential) and more.

November 22, 2011 — In the Asia-Pacific region, the photovoltaic (PV) market will grow 39% quarter-to-quarter and 130% year-over-year in Q4 2011. Q4 installations of more than 2GW are expected, which will significantly raise the region’s share of the global market for the year, according to the new Asia Pacific Major PV Markets Quarterly report released by NPD Solarbuzz.
 
The region’s PV capacity should grow an additional 45% in 2012, as Asian governments introduce new installation targets. China’s National Energy Administration recently revised its official cumulative solar installation target up from 10 to 15 GW for 2015, and the country will be home to 45% of regional demand in Q4 2011. Also read: Low prices stimulate China’s PV pipeline

Figure. Asia-Pacific market demand by region. Source: NPD Solarbuzz Asia Pacific Major PV Markets Quarterly.

National incentive programs in India and Japan are spurring growth. Emerging markets — Taiwan, South Korea, Thailand, Malaysia — are projected to deliver a combined 700MW of additional demand in 2012.

Non-residential ground-mount systems will account for 64% of the regional market by Q4 2012, up from just 16% in Q1 2011. The residential segment will fall from 58% in Q1 2011 to just 20% by Q4 2012, NPD Solarbuzz reports.

Internal rates of return (IRRs) on PV systems in the four major Asia-Pacific markets will build over the next four quarters, ending 2012 at levels between 10% and 13%, as system prices drop faster than incentive rates:

  • Project IRRs are at their highest for utility-scale PV facilities in China and India.
  • The more mature markets of Australia and Japan see the best returns in the residential segment.
  • In Japan, even with installed system prices significantly higher than other major markets, national and local incentives continue to provide favorable economics.

Market constraints and downstream access issues exist in most countries in the region. In China and India, financing, land use, and regulatory issues are a significant barrier to large-scale projects. India?s market is being shaped by domestic content requirements, while China?s State Owned Enterprises (SOEs) account for more than 50% of the 16 GW Chinese project pipeline. In Australia, policy disruptions have already forced many downstream players into liquidation. In contrast, a building international presence in the Japanese market is evidenced by a steady build in module imports from just over 5% of the market in Q1?10 to a short-term peak of 21% in Q1?11.

?As the European markets no longer present certain growth, the Asia Pacific markets are increasingly the focus of international companies looking to expand. Companies seeking to take a share of this growth still face significant hurdles to define strategies to successfully access the downstream value chain,? said NPD Solarbuzz analyst Christopher Sunsong. ?These challenges, though, are unlikely to deter their determination to participate given the potential of this new regional market opportunity.?

Also read: 2011 global solar PV installs

The Asia Pacific Major PV Markets Quarterly report brings together analysis of regional trends, major country market analysis, and developments in smaller country markets. PV market activity over the 12 quarters of 2010-2012 in the major markets of China, India, Japan, and Australia is covered in terms of market drivers and constraints, market segmentation, policy developments and their impact on the market, downstream trends, major project activity, installed system pricing, and PV project investment economics. The smaller country analysis covers new developments in the past quarter in Thailand, Malaysia, Taiwan, and South Korea. This new report includes a 150-page PowerPoint report, an Excel data summary, and PolicyTracker, a comprehensive Excel-based database showcasing each country?s incentive policies. For more information, visit www.solarbuzz.com.

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