The basic requirement for producing solar energy is enough sunshine – which is why solar power is particularly suitable in the “sunbelt” between latitude 30 degrees north and 30 degrees south. As concerns about climate and energy supply issues escalates, government support for the development of renewable energy is increasing and the cost reductions in the industry are moving towards a level approaching grid parity. Strong market growth is expected in several countries in the years to come, although the global financial crisis has had an impact on the solar business and growth figures for 2009.
Germany, Spain, USA, Italy, Japan and South Korea are the most developed solar markets today, but other markets are following suit and see solar power as a key resource in their future energy supply.
Market size 2008
In 2008, the Global Photovoltaic market reached 5.6 GW and the cumulative PV power installed totaled almost 16 GW compared to 9 GW in 2007 (source EPIA, Global Market Outlook for Photovoltaics until 2013; click here to download the report, EPIA's permission is conveyed herewith).
Market Size 2009 forecast
Due to the global financial crisis, the market size predictions for 2009 vary greatly from 5.5 - 7 GW.
GERMANY
Germany is the largest national market in the world, on the basis of its installed base, with a well-developed and competitive industry and an incentives scheme designed to promote on-grid solutions. The scheme is based on so-called feed-in tariffs (guaranteed electricity price for the producers for 20 years). The market growth in Germany from 2008 to 2009 was 49 percent. Germany is predicted to remain the world’s largest solar market through 2009.
Market Size 2008: 1.5 GW
Feed-in Tariff: 0.35-0.51 €/kWh
SPAIN
Spain is the second largest solar energy market in the world on the basis of its installed base. Spain saw an explosive increase of 482 percent in 2007, sparked by high feed-in tariffs combined with favorable insolation conditions. The Spanish market almost quintupled in one year from 560 MW in 2007 to more than 2,511 MW (2,5 GW) in 2008. The introduction of caps in the Feed-in tariff in 2009-10 has caused a halt in the Spanish market; however, PV investments continue to be attractive with new, lower feed-in tariffs.
Market size 2008: 2.5 GW
Feed-in Tariff: Rooftop <20 kW: €0.34/kWh; Rooftop >20kW: €0.32/kWh; Ground Mounted: €0.32/kWh
USA
There are large variations among the 50 states due to significant differences in energy needs, sun hours and political focus. There has been strong growth in the residential segment mostly due to the California Emerging Renewables and New Jersey programs. The eight-year extension of tax credit with removal of caps and new availability to utilities, combined with declining interest rates, causes the US market to grow. The U.S. market grew by 125 percent from 2008 to 2009, and is predicted to become one of the world’s largest PV markets by 2013.
Market size 2008: 342 MW
Investment Tax-Credit (ITC): 30 percent investment tax credit for both residential and commercial PV for 8 years
ITALY
This market has seen a significant growth in installations up to 1 MW, driven mostly by an attractive feed-in tariff system introduced early in 2007. Though the funding mechanism is now simplified, regional legislation, etc. still hinders project developers. The market grew by 80 percent from 2008 to 2009. Strong growth is expected in 2009-12.
Market size 2008: 260 MW
Feed-in Tariff: €/kWh 0.36-0.49
FRANCE
This market has a feed-in tariff that favors building integrated solutions. Despite the structure of the feed-in tariff, there is an increasing interest in ground-mounted and rooftop installations in France.
Market size 2008: 46 MW
Feed-in Tariff: 0.30-0.60€/kWh
JAPAN
Japan is now a market where solar power is competitive with minimal subsidies, and in some areas is completely commercially competitive. After having supported consumers’ investments in solar power installations since 1994, the Japanese subsidy scheme has now been phased out for residential installations.
Market size 2008: 230 MW
SOUTH KOREA
An attractive feed-in tariff for commercial and utility PV systems has fuelled market growth. In 2007, close to 30 MW was installed under this program. The cap of the program is 100 MW, and by the end of 2007 accumulated installed volume was 40 MW. Discussions regarding the removal of the cap combined with a reduction in the feed-in tariff are taking place.
Market Size: 274 MW installed
Feed-in Tariff: €0.27–0.38 for 20 years
INDIA
A large portion of India’s PV market is linked to various rural electrification schemes. A recently announced feed-in tariff may increase the focus on larger scale power plant projects. The ambition is to add 50 MW of grid-connected PV by the end of 2008 and 500 MW by 2013.
Market Size: 40 MW
Feed-in Tariff: €0.21/kWh for 10 years
OTHER EMERGING MARKETS
In Europe there are several growing solar markets with favorable conditions for solar energy as well as governmental support programs, such as in Belgium, the Netherlands, Czech Republic, Portugal and Greece.
Market Size 2008:
Belgium 48 MW
Czech Republic 51 MW
Portugal 50 MW
Greece 11 MW
China has a significant solar industry with high power supply demand, and is expected to develop a significant domestic market in the years to come.
China Market Size 2008: 45 MW