Demand outlook for the solar industry remains strong, and global solar installations are forecast to be around 46 GW this year, according to the latest quarterly update from Mercom Capital Group LLC. Global installations for 2013 are estimated to come in at about 37 GW, in line with Mercom's forecast.
Within a newly announced 14 GW goal, China has set an aggressive target of 8 GW for distributed generation and another 6 GW for utility-scale projects with specific quotas in individual provinces, Mercom says.
Japan is expected to install 7 GW to 7.5 GW of solar this year, which is similar to last year. Mercom says Japan faces some challenges, however, as the Ministry of Economy, Trade and Industry (METI) weeds out projects that, although approved, are unlikely to be built. In addition, the country's generous feed-in tariff (FIT) is likely to be reduced in the next month, and a 3% sales tax increase could further dampen demand.
The U.S. solar market is expected to install 6.4 GW this year, spurred by utility-scale projects and an energetic residential sector. Solar leasing has been the big driver of residential installations, Mercom says, with third-party finance companies raising $3.3 billion in residential and commercial tax equity funds in 2013. System costs in the U.S. are still high compared to Germany, but innovative financial instruments, including asset-backed securities, third-party finance and yieldcos, are helping bring the cost of capital down. Trade disputes, however, continue to be an issue.
Photovoltaic installations in Germany are expected to be around 2.75 GW this year. Germany's role in the solar market continues to decline as policy support retreats, Mercom says. In a bid to reduce price hikes in electricity, the latest policy proposals include bringing the installation levels closer to 2,500 MW a year. There is a proposal to replace the FIT with a tender system in 2017, in addition to a requirement that new solar projects greater than 500 kW market and sell electricity directly to consumers.
