At the start of every year I estimate what the global installations of solar will be. And every year I get it wrong and I continually underestimate the size of the market. You would think I should learn from my mistakes but I am constantly surprised by the growth in solar. I had expected a slowdown in the market this year after a record 75.2GW of new solar installations in 2016. My logic was that both the US and the Chinese markets would slow down after record years last year. However both these markets are experiencing much stronger growth than expected. The result is that 2017 is likely to not only be a record year for solar installations across the globe but also the year when it becomes the King of Power Generation.
You of course may ask why I keep estimating solar installations every year when I keep getting them wrong! I do so because it helps me to have a better understanding of a technology that I always thought would revolutionise global power generation. It also gives me an understanding of what countries across the world are doing.
The biggest market for solar is China and after a record year last year when 34.5GW was installed, I had expected the market to slow down significantly. However, after a weak start to the year there is significant momentum in the market, and it looks like the Chinese solar market could be as big as 39.5GW this year. In addition, next year is also like to be strong thanks to an increased target by the National Energy Administration of China for cumulative solar installations by 2020 of 150GW, up from 105GW.
The second positive is the US market, which is again stronger than expected despite fears of regulatory change by the Trump Administration. It is not likely that the market will be as strong as last year (15GW) but 13.2GW of solar could be installed this year. The other major positive is the Indian market, which is likely to install 9.6GW of solar this year, up from 4GW last year. There are also other positive surprises such as Germany, which is likely to break the 2GW mark for the first time in three years. And then we have a very strong Australian market where 1.5GW is likely to be installed this year.
The overall result is that we are likely to 87.3GW of new solar installations across the world this year, up 16% on the record year last year. Why is this happening? The principal driver is cost. Solar module prices are down over 30% year on year which is making the technology highly cost competitive. In addition, solar is highly flexible; it can be used in both small and large-scale installations. PV can be used to power calculators, they can be mounted onto our roofs or façades, and they can be configured in large-scale plants. Plus, installation is simple and quick. Whereas a nuclear power station with a GW of power capacity could take ten years from inception to commission to generating its first megawatts of power, solar can be deployed at breath-taking speeds.
2017 will also be the year when solar becomes the King of Power Generation. In 2011, there were 87GW of new coal plants installed in the world, a record in terms of yearly installations for any power generation. Solar will likely beat that this year with 87.3GW!
Going forward, increasing focus by manufacturers on improving the efficiencies of panels and thus reducing overall costs of producing electricity with solar means that solar will become increasingly the least cost method of producing electricity in a substantial portion of the world. In addition, we will have increasing amounts of low cost storage in the form of batteries, particularly as EVs are rolled out, which can be used to store the sun’s energy.
Hence, why I am clear that solar will become the major power generation technology of the 21st century throughout a large part of the world, with fossil fuels such as coal, gas and diesel being used solely as backup for when the sun is not shining.