The solar market earned $59.84 billion in 2013 and is estimated to reach $137.02 billion in 2020, reports Global Solar Power Market Analysis from Frost & Sullivan.
Asia Pacific will contribute for the majority share, contributing approx 46 percent of the global capacity in 2014, the report said. China, Japan, India, and Australia will drive the demand in the region during 2014.
Asian manufacturers are waiting for value chain integration and technical innovation so that they can differentiate their products from other suppliers as panel prices are going down, the report finds.
While sale volumes are primarily concentrated in Asia-Pacific, an upward growth trend is observed in other markets too, adds the report.
Europe has also witnessed a significant growth in solar installations in 2013. Germany still retains the no.1 position in Europe. Germany, France, Spain, Italy, and the United Kingdom together have plans to install additional 75 GW by 2020. The total global installed PV capacity in 2013 in the region was 137 GW.
Europe saw a fall in price of solar PV systems through this year due to less FiTs and further subsidy cut expectations. Obligation to Kyoto Protocol that aims to decrease greenhouse gas emissions was another driving factor for the growth of solar in Europe.
In the meantime in the U.S, price of solar PV systems declined due to the reduction in imports from China and the imposition of anti-dumping and illegal subsidy tariffs on imports.
The global solar power market gets advantage from various incentive schemes like tradable green energy certificates, FiTs, subsidies, and tax rebates. These incentive schemes are heterogeneous and makes solar PV penetration rates vary based on local and regional policies, said, Pritil Gunjan, Energy & Environmental Industry Analyst, Frost & Sullivan.
Increased focus on curbing the emissions of greenhouse gases is fuelling the global solar power market. If encouraged with proper legislation and the awareness for energy self-sufficiency these factors will help the solar power market grow, Frost report said.
As such, policy decisions are key driving factor for the market during forecast period. Environmental policies and upgrades of the grids will have an influence on electricity prices determining the extent of solar power uptake.
However, the market still faces challenges due the high installation and maintenance costs of solar PV systems. Intermittent supply, low investment return and availability of less expensive renewable energy are other key concerns.
Solar market is also facing competition from bank-funded projects in other proven energy technologies. Reliance on government support has impeded market development in some cases, withdrawing subsidies or incentives on solar projects.
Drafting strict clean energy policies and offering subsidies to renewable energy sector are essential. Maintaining clarity in incentive guidelines is necessary so that project developers and investors are not misled, noted Gunjan.