The worldwide market for solar energy is growing rapidly, as is evident from the high year-on-year (YoY) growth rate of cumulative installed capacity between 2006 and 2016. Solar PV is the second-most deployed renewable technology in terms of global installed capacity, after wind. 2016 was another remarkable year for solar PV market. Not only did it witness record annual additions in 2016, it also emerged as the largest renewable power source in terms of annual additions in this year. Solar PV represented about 43.3% of the new installed renewable power capacity in 2016, followed by wind and hydropower contributing about 32.7% and 17.7%, respectively. The increase in the global energy demand and decreasing system costs are the primary growth drivers for the PV industry. Additionally, climate and environmental concerns and government support are likely to further propel growth in the market. During the 2017–2025 forecast period, the global PV capacity is expected to increase from 387.3GW to 969GW as per GlobalData’s recent report ‘Solar Photovoltaic (PV) Market, Update 2017 – Global Market Size, Average Price, Module Market Share, and Key Country Analysis to 2025’.
|Figure 1: Solar PV Market, Global Installed Capacity, 2006–2025|
In 2016, the total worldwide solar PV capacity addition was 76.3GW, an increase of 50% compared to 2015. Asia-Pacific dominated the PV market with annual installation of 52,380MW followed by North America and Europe with installations of 15,055MW and 7,119MW respectively. From 2013, Asia-Pacific led in annual PV installations and in 2016 the region surpassed Europe to emerge as the largest PV market in terms of cumulative installed capacity. Asia-Pacific contributed 42.6% of the total global electricity generated from solar PV, followed by Europe with 34% and North America with 20.4%.
The figure below illustrates regional cumulative capacity of solar PV between 2006 and 2025.
|Figure 2: Solar PV Market, Global, Cumulative Installed Capacity by Region (GW), 2006–2025|
Asia-Pacific also has top manufacturing countries. Japan, China, and Taiwan are three of the largest solar PV component manufacturers in the world. Governments in the region are promoting solar module manufacturing through various long-term policies, financial incentives, subsidies, and tax benefits. Strong commitment from these governments for the development of solar energy has led to various R&D initiatives and increased solar module production and solar module installations, which will drive market growth.
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China remains the largest PV market with cumulative installed capacity of 77.5GW and 34.3GW of annual additions in 2016. The new additions in solar PV in China accounted for 45% of the global installations in the year under consideration. The US is the second-largest PV market in terms of annual additions in 2016 followed by Japan, India, and the UK. The top five countries which are China, US, Japan, India and UK accounted for approximately 86% of annual installations in 2016. China will continue to dominate PV installations during the forecast period. It is estimated that the country will add more than 223GW of capacity between 2017 and 2025.