Over 25% of total global solar capacity added in 2013: More to come

Global installed solar capacity increased significantly in 2013. Preliminary figures from the European Photovoltaic Industry Association (as reported by Mercom Capital Group)  show solar grew by 37,000 megawatts (MW) to 136,700 MW by the end of last year.

One trend worth remarking on is that a regional shift has occurred.  Europe – long the leader in the space – has seen a retrenchment from 17,500 MW of new installations in 2012 to just over 10,000 MW in 2013.  This is not surprising, as some former leaders, such as Germany and Spain, have throttled back the amount of new solar installations.

Instead, the reins have been handed over to Asia, with post-Fukushima Japan (6,900 MW) and energy-starved China (11,300 MW) leading the charge.  The U.S. increased its installed base by over 4,700 MW, up 41% from the previous year. On interesting characteristic of the growth patterns to date is that the upward curve has been relatively consistent even as the leaderboard changes.

Image: www.displaysearchblog.com

Deutsche Bank is predicting a rosy picture for the coming years, with 46,000 MW for 2014 and 56,000 MW in 2015.  What the actual future looks like is anybody’s guess, but several clear patterns are emerging:

1) costs continue to fall. The outcome of the current trade spat with China notwithstanding, the costs per installed watt – and kilowatt-hour generated, continue to decline.  While the cost reduction trend in hardware is expected to slow, the cost reduction in soft costs is increasing.

2) costs of financing are likely to decline in some markets. Until now, third party financing has supported the majority of installations in places like the U.S. and that money has been relatively expensive. Some financing will move from being the purview of banks to “yieldcos” such as that being launched by Sun Edison .  Yieldcos function like Master Limited Partnerships and can bring cheaper money to the game.

3) solar conversion efficiencies continue to improve. Technology is not static, and panel efficiencies continue to increase. Recent announcements in the lab suggest that there is still significant room for improvement, though it is one thing to do it in a lab and another to arrive at a commercially viable product.

4) public awareness continues to grow. What was a rarity just a few years ago is now a global phenomenon, as evidenced by recent installation figures. That in turn makes it more likely that new people will adopt the technology. In the U.S., it is now mainstream enough that customers can buy panels at Best Buy BBY +4.33%.   In the UK, one can get them from IKEA .

5) complementary technologies are growing, as well, particularly storage. Solar and storage combinations are already available from Tesla/Solar City.  These things will get cheaper and they will enhance the value of solar as an investment in reliability.

In summary, the 2013 global solar numbers are impressive.  Given the amount of innovation going on at so many different levels and in so many different areas, we should expect the growth curve to continue to be quite steep for the foreseeable future.

http://www.forbes.com/sites/peterdetwiler/2014/03/20/over-25-of-total-global-solar-capacity-added-in-2013-more-to-come/?ss=business:energy