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Global PV Market Expanding, but Still Dominated by Gigawatt-Scale Countries

According to research in our Marketbuzz report, global PV demand is expanding both geographically – as new regions begin to install PV at much lower prices – and in terms of scope, as more regions are installing at higher annual volumes. Compared to 2010, when only a handful of countries were installing 100 MW or more on annual basis, by 2016 there will be a more than three-fold increase in the number of countries with annual volumes of 100 MW or greater. In fact, our Most Likely forecast anticipates that there will be nearly 30 countries in the ≥ 100-500 MW range, while the gigawatt-scale markets (those installing 1 GW or more on an annual basis) will approach double-digits.

This expansion of PV demand reduces the risk of policy shock – a critical development for the PV industry, which in the past has relied on as little as two markets to drive global demand – as there are more countries driving significant end-market volumes to compensate for policy-driven downturns in other markets of similar size. This development may also help project developers and component manufacturers, as each country has its own quarterly, or even monthly, phasing, allowing projects/shipments/revenues to be recognized across the year, instead of depending on year-end surges.

However, despite this positive trend, the fact remains that the gigawatt-scale markets remain the primary drivers of PV demand. Given that these markets numbered only five in 2012 and accounted for over 70% of the global market, there is still an element of risk, because problems in just one of these markets could significantly alter total global demand. Over the coming years, this risk will decrease somewhat as more countries enter the gigawatt band. One of the most effective ways that PV industry players can reduce risk is to encourage as many markets as possible to grow to self-sustaining status. Unfortunately, this process may be slowed significantly by trade disputes and local content protections, as policy makers make moves to protect domestic firms at the expense of the end-market.

Figure 1: Number of Countries by Megawatt Install Band

Source: Adapted from NPD Solarbuzz Marketbuzz

Figure 2: Demand share by Megawatt Install Band

Source: Adapted from NPD Solarbuzz Marketbuzz