China to lead global growth of solar photovoltaic capacity to 2030

GlobalData Energy 18 October 2019 (Last Updated October 23rd, 2019 10:00)

China is the largest market for solar PV in the world with a cumulative installed capacity that amounted to 35.4% of the global market in 2018.

China to lead global growth of solar photovoltaic capacity to 2030

Global Solar photovoltaic capacity is expected to grow by over 1 TW between 2019 and 2030, with China representing the largest market, according to a recent report by GlobalData.

Global solar PV capacity is estimated to grow significantly from 494.3 GW in 2018 to 1,582.9 GW in 2030, according to the report entitled, ‘Solar Photovoltaic (PV) Market, Update 2019 – Global Market Size, Market Share, Average Price, Regulations, and Key Country Analysis to 2030’.

Most of the capacity addition during this period is estimated to come from China, India and other Asia-Pacific countries. China is targeting 210–270 GW of solar PV capacity by 2020 and India aims to deploy 100 GW of solar power by 2022.

Solar PV market, global, cumulative installed capacity (MW), 2010–2030

Source: GlobalData Power Database

China is the largest market for solar PV in the world with a cumulative installed capacity that amounted to 35.4% of the global market in 2018. Solar PV capacity in the country increased significantly from 864 MW in 2010 to 174.8 GW in 2018 at a compound annual growth rate of 94.2%.

Cumulative capacity increased especially during 2015–2018. 2017 was a remarkable year for the solar PV market in China as it recorded the highest annual solar PV addition of 53.1 GW. On September 2018, China increased its target for renewables to account for at least 35% of electricity consumption by 2030. The country’s target of 105 GW of cumulative installed photovoltaic power, which was originally planned for 2020, has already been surpassed by more than 50% in 2018. The country is now targeting 210–270 GW of solar PV capacity by 2020.

During 2019–2030; China is set to have the largest capacity additions each year with more than 25 GW planned to be added annually. About a third of the global capacity addition during this period is set to be from installations in China.

The US is currently the second-largest solar PV market with a share of 12.9% of the cumulative capacity in 2018. The country added 10.6 GW of the annual capacity in 2018. China and the US will continue to dominate solar PV installations during the forecast period of 2019–2030. Apart from China and the US, India, Japan and Germany are expected to have significant capacity additions during 2019-2030.

The average annual addition during 2019–2030 in India is estimated to be around 10.8 GW, while that of Japan is estimated at 4.8 GW and 3.0 GW for Germany.

The average capital cost of setting up solar PV varies widely from country to country. The decreasing production cost and government schemes are resulting in a decreased average system price of solar PV. The global average capital cost of solar PV plants was $4,162/kilowatt (KW) in 2010, reducing to $1,240/kW in 2018, and is estimated to fall further based on cost estimates in several countries and reach $997 by 2030. During 2019–2030, despite the growth in annual capacity addition, the market size is set to fall slightly due to decreasing capital costs. The figure below shows the average system price trend of global Solar PV and the top five solar PV countries between 2010 and 2018.

Solar PV Market, global, average cost of key countries and global ($/KW), 2010–2018

Source: GlobalData

Auctions/tenders have become a popular policy mechanism in recent years to develop solar PV in several countries including China, India, Australia, Japan, Germany, France, and Russia.

India is the pioneer in the solar PV auctions, holding its first in May 2017, and there have been several auctions in which solar PV projects were provided with contracts. In Germany, 986 MW of solar capacity was awarded at an average price of $53.5/MWh in 2018. Australia (Victoria) held its first auction in 2018 and awarded 254.6MW of capacity with the projects expected to come online by early 2020.

China conducted its first solar PV tender in June 2019. In this tender, China’s National Energy Administration (NEA) approved 3,291 projects with 22.8 GW of solar capacity at RMB 0.2795 ($0.0406)/kWh to RMB 0.55 ($0.08)/kWh. Out of the approved projects, 366 are ground-mounted utility-scale solar projects with a total capacity of 18.1 GW. Additionally, 473 are distributed generation solar projects totalling 0.6 GW, while 3,082 are self-generation or excess capacity solar projects totalling 4.1 GW.

 

Related Report:

China Concentrated Photovoltaic (CPV) Power Analysis, Update 2019