The end of grueling years for the solar manufacturing sector is in sight as market forces finally engineer a turnaround, says Lux Research.
The world’s solar PV market is poised to grow to $155 billion in 2018, to a healthy 10.5% compound annual growth rate(CAGR), the research firm says.
In the most likely scenario, the PV market will grow at a modest clip to 35 gigawatts (GW) this year before rapidly ramping to 61.7 GW in 2018.
"Manufacturers’ nightmare is turning into a long-term boon for the industry. Record low prices pushed gross margins to near zero or below, but they’ve made solar installations competitive in more markets," says Ed Cahill, lead author of the report, "Market Size Update 2013: Return to Equilibrium."
"Supply and demand will come back into balance in 2015, easing price pressure, returning manufacturers to profitability and restoring the industry to equilibrium," he adds.
Lux analyzed the levelized cost of energy (LCOE) in 156 separate geographies, accounting for 82% of the world’s population, to determine the viability and competitiveness of solar in each market.
Among their findings:
- U.S., China, Japan, and India will take over where Germany and Italy left off.
China will be the world’s largest market, growing 15% a year to 12.4 GW in 2018. It will be followed by the US with 10.8 GW of installations and an 18% CAGR.
- Utility-scale installations will grow the fastest, but commercial will be the largest market.
In 2012, utility-scale solar was the smallest segment at 8.6 GW, but it will grow the fastest to 19.9 GW in 2018 as developing markets turn to PV. Commercial applications will be the largest market as the US and Japan move to large rooftop installations.
- Opportunities abound for cheap IP.
Struggling start-ups present opportunities to acquire intellectual property at record low prices. For example, Hanergy acquired Miasolé which in 2012 had the top CIGS module efficiency at 15.5%. It spent just $30 million on the acquisition after investors had pumped $500 million into Miasolé.
Last year, solar passed the 100 GW threshold of capacity worldwide, with a third of that installed in 2012 and another third in 2011.
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