GTM Research expects 73 GW of new solar power capacity in 2016, a year-on-year jump of 43%, thanks to a very strong first half (H1) and despite a notable drop in demand in the second half (H2) of the year.
China is expected to install 26.4 GW of new solar this year, ranking as number-one globally. The US will be the second-largest solar market this year, GTM says, with 14.5 GW installed.
Overall, 80% of global demand this year are expected to come from the top five solar countries -- China, the US, Japan, India and the UK. GTM's quarterly Global Solar Demand Monitor reveals the five most important global solar trends that GTM expects to see in H2. See them below.
China’s Feed-in-Tariff Pullback
Earlier this year, China surpassed Germany as the world’s number one solar market in terms of cumulative PV installations. First half installations surged due to developers rushing to meet the June 30 feed-in-tariff drop deadline. The month of June alone had over 10 GW installed, close to half of what is expected for the entire year. However, lower feed-in-tariffs and a halt on new installations in three leading provinces will pull back demand sharply in the second half of this year.
UK’s Decline
The UK experienced a record-breaking first quarter, with 1.5 GW installed in advance of the expiration of Renewable Obligation Certified incentives. But that trend will not continue. GTM Research expects a major drop in demand for the remainder of the year, with no new utility-scale projects coming on-line and a quarterly cap on feed-in-tariffs for residential and commercial capacity.
India’s Tender Pipeline
According to the report, India will grow 127 percent this year, displacing the UK as the no. 4 solar market globally. India’s pipeline of auctioned projects has ballooned to 25 GW, and GTM research anticipates 3.8 GW of it to come to fruition in the second half of the year, more than twice what came online in a successful first half.
Japan’s Slowdown
In Japan, new government rules and regulations around feed-in-tariffs are expected to eliminate close to 30 percent of the nation’s 56-GW pipeline of approved projects. This will mean a sharp negative turn for the market in 2016 which GTM Research expects to shrink by 12 percent year-over-year.
US Project Spillover
While the extension of the federal Investment Tax Credit helped solidify the US as a top three market through 2021, one of the side effects is project spillover. In fact, GTM Research has revised its 2016 forecast downward to 14.5 GW. However, that demand has shifted to 2017 in which 60 percent of utility PV capacity additions are expected to come from projects that were initially set to come on-line this year.
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Global PV demand to 2021. Source: GTM Research Global Solar Demand Monitor, Q3 2016.
