The outlook for solar in 2018 seems positive, with several large-scale power projects scheduled to start generating electricity this year, not to mention the expansion of solar into new markets like Australia and South America.
But how much solar will we actually see in 2018? Let’s examine the recent developments and projections for solar around the world.
Solar Market Trends In 2017
The past year was a banner year for solar, with several large-scale PV installations coming online in countries like China, France, and India, as well as numerous smaller-scale projects around the world, often focused on providing clean and green power to communities that need it.
To start, China made a massive 331.3 MW of large-scale solar power projects financially available, with nearly half of these projects being built in the past year alone. This was largely in response to President Xi Jinping’s call for the country to reduce its reliance on coal-generated electricity and move towards more renewable energy sources.
In 2017, global solar demand increased by 14% from the prior year—but China alone accounted for 48% of this growth, according to the Global Market Survey Report from research firm ARC Advisory Group. This shows just how much of a role China plays in the solar industry, especially considering that the country’s economy is currently facing a ton of downward pressure because of the ongoing trade war with the United States.
But the solar boom didn’t start in China. As we’ve established, India saw over 200 MW of new solar power projects commence construction in the past year alone.
New solar power project construction in India. Image: sicvis.com
What’s interesting is that a significant portion of these projects were built with the express purpose of supplying power to the growing number of communities in India that lack access to electricity, as well as to create more economic opportunity for local residents. This is in contrast to the larger-scale projects that have been enabled by government subsidies, which have mostly benefited large industrial players in the country.
Expectations For Solar In 2018
With so much development and new projections focusing on solar power in countries like China and India in recent years, it’s not surprising that more and more individuals and companies are turning their attention to the solar industry in 2018.
Based on the progress made over the last year, as well as the ever-increasing costs associated with solar power, developers, investors, and power suppliers are starting to see the benefits of solar and are optimistic about its future. This, in turn, is driving more people to invest in solar and help fuel the growth of the solar industry in 2018.
According to a new report from research firm New Energy Finance, the global market for off-grid solar PV in 2022 will be worth $24.9 billion and will grow at a CAGR of 16% compared to 2022.
The report predicts that by 2025, off-grid solar PV will represent 41% of the total solar market, while the on-grid segment will grow at a CAGR of 19%.
What’s interesting about this growth is that it’s being fueled by rising demand in emerging markets like South Africa, which has one of the fastest-growing solar markets in the world. The country’s government has set an ambitious target of generating 20% of its electricity from renewable sources by 2022, and research firm New Energy Finance expects this target will be achieved. By 2027, the country will have 100 MW of solar capacity installed—making it Africa’s biggest solar market.
Australia And South America, Two Markets In The Making
Even though solar energy is gaining in popularity around the world, it hasn’t reached many of the developed markets yet. And considering that the cost of solar power continues to decline, it’s quite possible that it never will.
However, that won’t be the case for long. In 2018, we’re already starting to see the first signs of solar being adopted in the developed world. And while the technology won’t be cheap, it will be very competitive. That’s what’s fueling the demand in the first place—the falling prices of solar energy.
In 2018, the United States is set to miss the opportunity to play a major role in the future of solar energy. Despite efforts from Congress to pass the United States Solar Energy Innovation Act, only two bills have been signed into law by the president, with no major policy changes made. This has led to a decline in demand for solar in the country. But that’s not to say that the industry is going to disappear from the U.S., because there are still several opportunities for U.S. manufacturers and suppliers to gain a foothold in the growing solar market. In fact, it’s one of the few industries in which the U.S. still maintains a significant lead over other countries.
But the opportunity for the U.S. is not limited to the energy sector. The technology behind solar is extremely versatile and can be used in a number of different industries, including construction and infrastructure, digital and mobile communications, and automotive. This makes it easier for U.S. businesses to gain a presence in the growing solar market, especially as most of the demand comes from companies that are expanding into the global marketplace.
Another market that’s seeing significant interest in solar is Australia. Politically and economically, the country is leading the way in the transition to a more sustainable future. Thanks in large part to its high oil prices and increasingly unreliable energy supply, which recently led to a 100% increase in renewable energy mandates, the country is clearly looking for ways to cut back on its energy consumption. And what better way to satisfy this demand than with solar energy?
According to research firm GTM, Australia will have 221 MW of new solar power capacity installed by the end of this year, with an additional 1,350 MW projected to be completed by the end of 2022.
The country currently has a 100% government-subsidy program for solar power, offering cash payments of up to $15,000 for residents to install systems on their homes. In addition, commercial leases for solar systems are available for a fixed price of $5,000 per year, plus bills.
The future of solar looks exceedingly bright, with billions of dollars in investment and hundreds of new projects underway worldwide. The industry’s future is definitely in sustainable energy, and as the costs continue to decline, it’s going to become even more competitive.