The Next Two Years will See Double-digit Growth in Global Photovoltaic Installations
Utility-scale solar power capacity is expected to grow by double digits globally in 2019 and 2020, driven by expansions in the United States, Europe, Middle East and China, U.S. bank Goldman Sachs said on Thursday.
“We expect the combination of lower costs for solar and favorable policy support providing a multi-year runway for utility-scale to drive meaningful upside to the market,” the U.S. investment bank said in a research note.
Solar power is taking market share from fossil fuels like thermal coal and natural gas as governments and companies increasingly introduce clean energy targets.
Goldman estimated that in 2019 global utility-scale installed PV Capacity will Leap to 108 Gigawatt (GW), and in 2020, this number will reach 119 GW, up by 10 percent. Despite the slowdown in 2021 and 2000, the bank expected capacity to reach 129 GW and 135 GW.
Utility-scale solar is defined as an installation that is designed solely to feed electricity into a grid, unlike smaller scale residential solar units. Including residential installations, most analysts expect global solar power capacity to soon hit 600 GW.
Solar power has been booming not just because of government and corporate sustainability targets, but also thanks to a sharp drop in panel prices in recent years. Solar panel costs have plummeted from around $70 per watt of electricity generated in 1980, to $0.36 per watt currently in the United States, according to energy consultancy Wood Mackenzie.
"We anticipate some of the strongest growth to materialize in key regions such as the U.S., Europe, and the Middle East while we see some potential upside emerging in China where demand appears to have stabilized in recent months following a collapse when Chinese “531” New policies limited PV mounting through the latter part of 2018," it added.
This is owing to China’s efforts in a new push on grid parity. Following the announcement by the National Development and Reform Commission (also referred as NDRC) and the Bureau of Energy in January, the Energy Bureau make adjustments on subsidy and bidding on a discussion with the related companies in February.
Supply-side grid parity materialized in key areas in China where the cost to produce electricity is lower than the real price. Meng Wei, spokesman of the NDRC said cost for solar equals to coal cost for power sold in areas with rich resources, lower construction cost, potential market and favorable conditions for investment.
China Securities Finance policy expected in 2019 and 2020, the capacity will reach 40 GW, while Guangfa Securities estimated the number will be ranged from 41.5 to 48 GW.
For the industry, the increase in solar capacity will lead to the rise in downstream power stations and greater demand for equipment and raw material in upper and middle reaches.