With the U.S. in the lead, due in large part to the recent extension in the country’s federal investment tax credit (ITC) late last year, the global solar photovoltaic pipeline now surpasses 200 GW, according to a report from IHS Inc. At a combined capacity of 110 GW, projects in the U.S., China and Brazil make up half of the current PV pipeline.
“A large share of the planned projects is still immature, with developers scouting for tenders and other opportunities to sign power-purchase agreements,” explains Josefin Berg, senior analyst for IHS Technology. “The previous panic to complete project phases ahead of schedule has reverted to a development pipeline responding to demand and contract fulfillment.”
The report says the biggest growth of the global solar pipeline has been in the U.S., where 16 GW of new projects entered the pipeline in 2015; at the same time, 10 GW of tracked projects were installed or entered construction. As a result of the ITC extension announced in December 2015, the U.S. pipeline is now changing shape, according to the latest IHS Solar Deal Tracker.
Early-stage U.S. projects that faced the challenge to complete development and break ground, in order to reach completion prior to the previous deadline at the end of 2016, are now relaxing their schedules, as they do not need to enter construction before 2019 to benefit from the 30% ITC.
“We expected to see some hectic activity from late-coming developers in 2016; however, after the ITC extension, developers have calmed down,” says Christine Beadle, senior analyst at IHS Technology.
On the opposite end of the global spectrum is the U.K., where the PV pipeline of pre-construction projects decreased by more than 4 GW in 2015. The report says projects continue to be built, but few new projects have started development, because of the looming expiration of the Renewable Obligation Certificates scheme in April 2016.
Economies of scale and an inclination for oversized projects are expected to increase system sizes. Two-thirds of the global PV pipeline capacity are projects larger than 50 MW. Developers in both the U.S. and China target economies of scale by implementing large projects in areas with abundant land. The oversizing of module capacity in relation to the output inverter capacity also raises total system sizes. In the U.S., IHS tracks projects where the module capacity is up to 40% higher than the inverters.
“Among the markets with the largest pipelines, only Brazil prefers the more modest system size of 30 MW, as a result of regulation; however, Brazilian developers are bundling projects to reduce costs,” says Berg.