New policy in China to hit hard Q3 PV demand, Q4 will be slightly better

Global solar demand in July-September will reach its lowest quarterly level since 2015, mainly because of China’s move to cut support for new utility-scale photovoltaic (PV) projects and put a 10-GW cap on distributed generation (DG).

According to GTM Research’s Global Solar Demand Monitor, fourth-quarter demand will be up by 42% quarter-on-quarter as the Chinese market begins its recovery and the US enters its most busy installations period of the year.

GTM projects that global PV demand will contract to 85.2 GW this year. In China it will plunge from 48.2 GW to 28.8 GW.

FIVE-YEAR FORECAST

Solar power capacity additions in China will no longer be in the 30 GW-40 GW range that the market was used to as auctions and subsidy-free projects become the main demand drivers. Instead, GTM Research expects the new normal for annual installations in China to be of 20 GW to 25 GW.

Speaking of tenders, the market research company believes that solar bids will continue their downward slide. “By 2022, awarded prices as low as USD 14/MWh will be old news,” it says.

Asia is expected to be home to at least half of global capacity additions through the end of the decade. China, India and Japan will together account for 20% of the global market through 2023.

The contribution of solar installations in North America and Europe will remain relatively stable, averaging 16% and 12%, respectively, through 2023.

Mainly thanks to projects in Saudi Arabia and the UAE, the Middle East will lift its share of global installations to 9% by 2023 from 3% in 2018. Latin America will be responsible for an average of 7% through 2023, with Mexico, Brazil and Chile building 81% of the region’s new solar power plants.

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