June’s policy change by the National Energy Administration in China, which terminates any approvals for new subsidized utililty-scale PV power stations in 2018, has significant ramifications for the global solar PV market, according to GTM Research.
In its “Global Solar PV Demand Monitor: Q2 2018 Market Trends Update,” the research firm writes that their expectation for Chinese PV demand in 2018 has fallen from 48.2 GW to 28.8 GW. China will now install 141 GW between 2018 and 2022, down from 206 GW. In addition:
- Global PV demand in 2018 will fall to 85.2 GW, down from an expected 103.5 GW in GTM’s pre-policy change forecast.
- As China’s market slows, module prices will fall more rapidly as a result of increased oversupply.
- The benefits of lower module prices will be tempered in markets with import tariffs in place, such as the US and potentially India.
The report goes on to state that, even with a demand slowdown in China, Asia will continue to account for “at least 50%” of the global annual install through 2020.
Furthermore, the report notes that North American installs compared to global installs will remain somewhat stable, averaging 16% and 12% respectively through 2023. As for the Middle East, GTM expects the region to triple its share of global installed capacity from 3% in 2018 to 9% in 2023, while Latin America will account for an average of 7% of global installs through 2023.
As illustrated in the chart below, GTM Research projects Q3 2018 will see the lowest quarterly level of global PV demand in years.
The report notes that low demand in Q3 2018 is “almost entirely attributable to China, as feed-in tariffs for utility-scale projects have been withdrawn and DG projects are capped at 10 GW.”
It’s not all bleak, however. The report expects demand in Q4 will rise by 42% as the Chinese market begins its recovery and the US sees strong quarterly installations for the year.