/ Diversification in the Global Solar PV Industry

As an important branch of renewable energy development, the photovoltaic (PV) industry has experienced rapid growth for years. What new advancements are brewing in 2015?

Before making any predictions, let’s take a look at the global market as intense competition takes place.

In the recent decade, the growth rate of global PV capacity has been obvious. Because the PV industry was still in the early stages of development, the growth spurt was mainly derived from government support.

Take Germany for example. The Renewable Energy Act came into force in the year 2000 – driven by this tariff policy, PV power generation rapidly developed. The US Department of Energy released a technical manual as a guide for companies to install and use solar energy, and provided loan guarantees of $2.5 billion for solar application projects, which largely contributed to the development of PV technology. Under governmental support, as of 2014, the global usage of PV techonology is already a hundred times more than in 2000.

The European Union has led the development of PV technology, while the United States, Japan and China are rapidly advancing. As Europe has always placed significant attention in the development of clean energy, it has maintained around 80% of the the world’s PV usage over the years. However, after the European debt crisis, Europe showed a significant decline in installed capacity.

The United States, Japan and China, as rising stars, have experienced faster growth. Currently, China’s usage of PV technology has risen from 1% to 30% of the global market. The PV power generation is slowly but surely spreading from Europe to the rest of world.

Global PV capacity will continue to growth, but the growth rates will fluctuate, and are significantly affected by governmental policies.

Specifically, the global PV industry has experienced three distinct peaks. In 2004, the growth rate increased over 90%, this growth was mainly driven by the rapid increase of Germany’s installation capacity. In 2004, the German PV installation capacity was 650MW, which was an increase of over 300% and accounted for 60% of global installation capacity. The power driven by this growth came from the PV generation policies forced by the German Renewable Energy Act.

In 2008, the global installation capacity topped 5GW, an increase of 150%. In the same year, Spain’s installation capacity reached 2758MW, an increase of over 400%, which became the main factor. The government failure to reducing power price contributed to this increase.

Last but not least, in 2010, the global PV capacity exceeded 15GW, as an increase of over 100 percent. In the same year, Italy’s PV capacity increased by more than 400 percent, in which government subsidies played an important role.

As a result, despite the continuous growth of installation capacity, the growth rate was heavily influenced by country. Therefore, there is instability in the PV market.

The current PV market is greatly influenced by government policies. In order to analyze the 2015 global PV market trends, it is crucial to start with the policies of each country in recent years.

Germany’s policy has been tightened. As a country that supports the development of new energy, Germany has shown huge support to the PV industry. However, the Germans adopted a new bill to cut energy subsidies last year, which impacted the Renewable Energy Act that was implemented in 2000.

Germany has driven an increase in utilization rate of PV generation capacity through the feed-in tariff mechanism. After 10 years of development, the drawback of such an approach was gradually revealed. The excessive subsidies might undermine the basis of industrial development in Germany. As a result, the revolution was intended to break the existing subsidy mechanism. The tightening of this policy directly led to a decline in installation capacity, and Germany, as the main country in the PV industry,  dragged the rest of the world down due to this decline.

Moreover, The European Union will phase out subsidies for renewable energy. Last year, the European Commission issued a new regulation that would phase out state subsidies for solar, wind, biomass and other renewable energy, and that all EU member states would be forced to limit subsidies for renewable energy from 2017 onwards.

The main purpose of the new regulation was to facilitate the new energy industry to be more market-oriented, and not overly depend on government subsidies, in order to strengthen the competitiveness of the renewable energy industry. After this subsidy abolition, the growth of PV in the EU may slow down.

Ukraine has canceled subsidies for solar electricity. The Ukraine Ministry of Energy and Coal Industry announced that subsidies for the solar program in Crimea had been canceled. This cancellation resulted due to the Russian annexation of this region, which also caused a subsidy increase in the wind energy. Cancellation of PV subsidies would affect the growth of new installation capacity.

The US has launched incentive policies for photovoltaics. In light of the new policy, the photovoltaic power generation has shown rapid growth. As of last year, the photovoltaic power generation was able to meet the electricity needs of more than 2 million households in the country.

In order to continue the development of solar power, the United States Department of Energy invested $15 million to help families, businesses and communities in the development of solar energy projects. EPA also launched a green energy cooperation program that will help double the utilization of renewable energy within the next decade. Currently, US policies are in favor of the development of the PV industry. As the PV market continues to grow, the US is expected to experience an increase in installation capacity.

The United Kingdom heavily supports PV technology. Swindon, UK passed a measure that would allow PV plants to localize. The government would loosen controls on PV power plants, and residents could recommend to Parliament locations that they feel were suitable to develop PV power plants, whereby an assessment of feasibility by the Parliament would then be made. If the recommended place turned out to be appropriate, Council would then approve the project, which meant that the construction would not require any further applications.

This measure has given the locals high autonomy, which enables them to decide whether to build new PV plants. The PV installation capacity within the UK has thus rapidly increased.

Overall, national policies for the PV industry represent differences in countries. Due to the gradual cost reduction of PV power generation, the global PV installation capacity in 2015 will continue to grow. The momentum in the United States and the United Kingdom is more prominent. However, due to tightening policies in several major countries, global growth will not be significant – the growth rate is expected to be 20% higher than that of 2014.


“Diversification in the Global Solar PV Industry.” Of Week. Of Week, 16 June 2015. Web. 12 July 2015