After global installations of solar fell for the first time ever in 2018, they’re set to rise again in 2019, a new report from Woods Mackenzie found. The company anticipated that the industry will bounce back this year, surpassing 100 gigawatts (GWs) with more diversity and lower-cost projects.
“Even just a few weeks into 2019, there are positive signs for the global solar market. We’ve already seen policy clarity in China and Saudi Arabia, highly aggressive solar-plus-storage pricing in Hawaii, and more bold plans for some of the world’s largest single-site PV projects in India,” wrote Woods Mackenzie analysts Tom Heggarty and Benjamin Attia, in their “Global solar PV markets: Top 10 Trends to Watch in 2019.”
That’s following a bumpier 2018 for the industry, when the industry saw its first drop in global installations since 2001. Woods Mackenzie attributed the drop in 2018 to China’s policy shift, slowing growth there, Trump’s Section 201 tariffs in the US and India’s cancellations of mega-tender cancellations swell as Japan’s feed-in tariff cut, among others. Basically, a lot of uncertainty impacted the market in 2018.
In 2019, the report said that for the first time in 2019 it now anticipates that the market will rebound and reach 103 GWs of new installations as the market continues to diversify. While China will remain important to the global market its share is now falling, from 55 percent of new installations in 2017 to an antiquated 19 percent in 2023. By that time 20 markets will account for 83 percent of new solar installations with the Middle East and Mediterranean (Saudi Arabia, Iran, Egypt, and Italy), proving to be strong markets. It also anticipated that by then the amount of solar installed annually will reach 115 to 120 GWs.
The lowest bids for solar power projects are also expected to drop, according to Woods Mackenzie. Average bids for solar projects in the Middle East are now falling to under $30 per megawatt hour (MWh).
“Technology costs have continued to fall rapidly, with global average utility-scale solar costs falling another 15 percent last year. We believe that ultra-low PV costs still have room to fall as low as $14/MWh under optimized assumptions,” the authors said. Already auction prices in Saudi Arabia in 2019 were won by projects with prices as low $23.40 per MWh.
The report also anticipated large oil and gas companies will increasingly enter into electricity. It anticipated they will face challenges in the market, but noted renewables can complement extractive technologies.
In the US Woods Mackenzie anticipated that big businesses will continue to make big solar power purchases, led by technology companies. It found that 25 percent of all projects announced in 2018 were driven by corporate procurement. Looking ahead to 2019, it anticipated that the share rise modestly in 2019 as companies are eager to sign contracts for solar power before the 30 percent investment tax credit drops and interest rates for financing projects go up.Tweet