Solar Photovoltaic Is Becoming a Mainstream Technology
Energy system flexibility, supportive policies, and smart initiatives create market momentum
LONDON — Solar power is finally maturing as a key energy source on the global stage and is expected to reach grid parity by 2020, according to a new analysis from Frost & Sullivan.
In addition to green targets, energy independence, and distributed energy, a crucial market accelerator has been the defining of the structure of feed-in tariffs (FiT) for solar photovoltaic (PV)-generated power, noted Frost & Sullivan. Along with regulatory dynamics and incentives, this has lowered the levelized cost of electricity (LCOE) of solar power. With higher economies of scale, the cost of solar power systems for both residential and utility-scale PV is projected to reach grid parity by 2020 and increase uptake of decentralized solar energy. As a result, stakeholders from raw material suppliers, solar cell manufacturers, solar module manufacturers, and balance of system equipment suppliers to system integrators and installers are positioned for robust growth.
The Frost & Sullivan analysis finds that market revenues stood at $113.75 billion in 2015 and are forecast to grow at a compound annual growth rate (CAGR) of 9.5 percent to reach $179.13 billion in 2020. Installed capacity with grow from 50,780 MW to 76,600 MW at a CAGR of 8.6 percent for the same period.
“Pro-solar incentives and the recently made pledges at the COP 21 summit will ensure that the market for solar PV continues to grow exponentially over the next 5 years,” said Frost & Sullivan Energy & Environment Research Analyst Pritil Gunjan. “Grid integration of renewables and investment in energy storage initiatives are other market enablers.”
Geographically, Asia will see aggressive expansion of solar PV fueled by economic growth, urbanization, and greater electrification.
“Extreme weather variations, declining energy reserves, and increase of distributed generation technologies will compel utilities to seek newer models supporting energy efficiency and energy management initiatives,” noted Gunjan. “The solar PV supply chain participants are expected to develop new technologies that will lower costs and integrate PVs with flexible infrastructure grids. Innovative business models to integrate solar power will also open opportunities in smart metering, demand response, and net metering.”
For more information, visit www.frost.com.
Publication date: 8/1/2016