New solar energy installations will grow faster this year than previously expected, according to Mercom Capital, which will make 2015 another strong year for the global solar market.
Releasing an update to its 2015 solar market report, Mercom predicts new installations will reach 57.4 gigawatts worldwide in 2015.
New market data from China, along with revised installation goals, prompted the upward revision, Mercom Capital Group co-founder and CEO Raj Prabhu explained in a press release.
The Austin, Texas-based market research, consulting and communications company also revised its 2015 forecast for new solar installations in India upward. Fueled by a renewed drive on the part of Prime Minister Narendra Modi's government, some 2.2 GW of new solar capacity will come online across India this year, Mercom predicts.
China, Japan and the U.S. will account for around 60 percent of new solar installations this year, according to Mercom. China again raised its 2015 solar target by 20 percent, to nearly 18 GW, since Mercom made its previous annual forecast three months ago.
“With the specific steps put forward by the [China] National Energy Administration (NEA) and the 5 GW already installed in the first quarter, 17.8 GW is a more achievable target this year,” Prabhu was quoted as saying. “Omission of a specific installation target for distributed solar projects, which contributed to missing the 2014 goal, is a positive."
An ongoing ratcheting down of solar FiT rates will continue to dampen solar energy installations in market-leading Germany. Some 400 megawatts of new solar power capacity came online in Germany during the first four months of 2015, as compared to 622 MW in the same period a year ago. Mercom predicts a total 1,300 MW will be installed across the country in 2015.
Highlighting the marked difference between U.S. and German solar incentives, residential photovoltaic installations have been the main growth driver of German solar energy capacity. Rather than an FiT, as is used in Germany, the U.S. relies on investment and production tax credits. That's resulted in utility-scale solar energy development being the predominant driver of solar energy deployment in the U.S.
That said, Germany conducted its first auction for utility-scale solar in April as it looks to identify a cheaper alternative to its solar FiT. With a proposed 150 MW up for bid, the auction was four times oversubscribed, Mercom notes.
With awards being made to the lowest bidders, the average cost for Germany's first utility-scale solar auction turned out to be slightly more expensive than it would have been under the FiT model, according to Mercom. With a second auction slated for August, the market research company expects the program will be modified in 2016.
Here in the U.S., Mercom predicts a total of approximately 8.8 GW of new solar power capacity in 2015. New installations are expected to reach new highs this year and next in advance of a scheduled scaling back of the federal solar ITC at year-end 2016.
The U.S. has been a leader when it comes to developing innovative ways of financing solar energy deployment, such as third-party solar leasing and loan programs, the formation of tax-advantaged yield companies (“yieldcos”), and securitization of pools of solar loans and leases, Mercom points out.
“In the first half of this year, third-party solar finance companies have raised almost $3 billion dollars in lease and loan funds, on course to make this the best fundraising year for solar lease companies. As the ITC expiration draws closer, we expect this activity to strengthen in 2016,” Mercom writes in its latest annual market report.
Furthermore, a third of corporate managers surveyed said their companies would make their first solar energy investments within the next year. Looking out over the longer term, no less than 83 percent of the 100 corporate managers surveyed said their commercial organizations will make investing in the solar energy sector a priority by 2020.
Aside from addressing climate change and environmental degradation, the potential to earn comparatively high, stable and longer-term returns on investment (ROI) is a primary motivating factor for U.S. corporate investors, Wiser Capital highlights in a press release.
International trade disputes surrounding Chinese solar photovoltaic exports cloud attempts to accurately gauge and forecast the amount of solar energy that will be installed worldwide, Mercom points out. Following the imposition of punitive import duties in 2014, the EU has opened an investigation into EU imports of Chinese PV panels from Taiwan and Malaysia.
In addition, the EU is reviewing the current minimum import price established for Chinese PV panels as a result of an agreement with the Chinese government last year. Due to expire in December, the EU recently imposed tariffs on three solar companies for violating the agreement, Mercom notes.
*Image credits: 1) Flickr/Jason Morrison; 2), 3) Mercom Capital
An experienced, independent journalist, editor and researcher, Andrew has crisscrossed the globe while reporting on sustainability, corporate social responsibility, social and environmental entrepreneurship, renewable energy, energy efficiency and clean technology. He studied geology at CU, Boulder, has an MBA in finance from Pace University, and completed a certificate program in international governance for biodiversity at UN University in Japan.