The year isn’t over yet but already it’s time to start putting the year in perspective and, with 76 gigawatts of new solar installed, it looks like this will be the penultimate year for solar power. That’s according to Mercom’s Global Solar Forecast November 2016. The consulting firm estimated that the solar capacity installed in 2016 will be 48 percent higher than the 51.2 gigawatts of worldwide solar installed in 2015 and more than the 70 gigawatts it anticipated will be installed in 2017.
Earlier expectations for 2016 anticipated that the solar industry would see a slowdown in its growth—in December 2015, Mercom anticipated for instance, that the world would install 64.7 gigawatts of new solar. Now it looks like it will be the biggest year yet for solar, driven by demand in China, the US—even as the extension of the Investment Tax Credit (ITC) lessened pressure for meeting deadlines—and other countries.
“Global solar demand will overshoot most forecasts made earlier this year due to an unprecedented level of activity in China,” said Raj Prabhu, CEO Mercom. "Record installations in China followed by a slowdown resulted in an oversupply situation, which led to a module price crash. Low module prices are helping demand recovery going into 2017.”
China, the market leader in terms of new installations surpassed its 2016 goal of 18.1 gigawatts of new solar 2016 in the first half of the year, according to Mercom. It anticipated that the country will install 22 gigawatts of solar this year, up significantly from the 15.1 gigawatts it installed in 2015. Mercom attributed the increase in the first half of the year to developers trying to complete projects before a June 30 tariff deadline.
The push to complete projects, according to Mercom led to more production of solar panels ahead of the deadline. Demand fell afterward which triggered a solar panel prices drop of roughly 30 percent.
The US is likely to meet the Mercom’s earlier expectations of 13 gigawatts of new solar in 2016. “The US market is projected to grow about 78 percent year-over-year in 2016. Utility-scale solar projects continue to drive the U.S. solar market with an estimated pipeline of more than 30 GW,” Mercom reported.
Still, prior to the December 2015 extension of the ITC, forecasts for the US were higher in 2016. Mercom noted: “A substantial number of large-scale projects have been postponed to 2017 due to the absence of an impending ITC deadline.”
The report also anticipated growth in power-purchase agreements in the US, observing that they are being signed at lower prices. It attributed that partly to the glut of solar panels in China. Such factors could result in a strong 2017 for the US, according to Mercom. Currently, it anticipated that the US will install another 13 gigawatts in 2017.Tweet