Next 10 years: opportunities and challenges for emerging mar

Over the past decade, with more countries joining the “club of Jiwa”, the new market will bring new challenges to solar energy.

With countries from Saudi Arabia to Pakistan to Malaysia joining the jiva club, the emerging solar market will mature in 2020.

Outside the OECD, wood Mackenzie said it now plans to auction in 44 countries and build 180 gigawatts of solar projects in nearly 120 countries.

However, the new market will bring new challenges to the solar industry. These risks include the risk that renegotiation of power purchase agreements (e.g. in South Africa and India) and the lowest auction price (mainly in GCC countries) will lead to a lack of funding for weak offtakers, thus enabling the government to set unrealistic low price expectations in more challenging markets.

Reflection on the 2010’s

In the 2010’s, solar’s performance exceeded expectations. The global cumulative solar installed capacity is more than 600 gigawatts, higher than about 200 gigawatts at the end of 2009.

At the beginning of the past decade, Germany accounted for 52% of global solar installations and was the only country to install more than 1 GW per year. Fast forward to 2019, with more than 1 gigawatt of solar installed in 16 countries in major regions.

In the past decade, China has also become the leading power in the upstream and downstream of photovoltaic industry. In 2009, China accounted for 2% of global installations. Only eight years later, it occupied more than half of the market.

The success of solar energy in 2010 led to a boom and bust cycle in many markets, as the government introduced subsidy programs while the cost of solar energy fell, leading to a short surge in the market before the subsidy program was cancelled.

The ups and downs of that period have basically ended, and a comprehensive change has taken place in the next few years, from feed in tariff to competitive auction. These measures provide policy makers with a more effective tool to control deployment speed, and provide a way to obtain increasingly low-cost power.

In the new decade, costs will continue to fall, but much more slowly than before, as the focus of the industry shifts from capital expenditure to average costs.

At the beginning of the new decade, solar photovoltaic projects in some markets are now being developed without any government support, which shows that the industry has made progress in the past decade.

New applications in the new decade

In the 1920s, the mining industry will bring opportunities for the solar industry. Social concerns and the high cost of oil-based electricity are prompting mining companies and others to see PV based systems as a cleaner (and in many cases cheaper) alternative.

Hybrid solar photovoltaic system will become the preferred solution for more and more applications. Pairing photovoltaic cells with cheaper ones can provide stable zero carbon power; combining them with existing fossil fuel generators can reduce the carbon intensity of power supply.

Floating solar energy and related technologies will also accelerate development, so that solar photovoltaic investors have more competitive opportunities than ever before.

Finally, off grid solar provides an important opportunity. For those who currently have no electricity supply or insufficient services from existing suppliers, off grid solar photovoltaic infrastructure will bring solar energy to places that previously could not be achieved.

Growth rule changers

There is no doubt that solar photovoltaic has a promising future in the next decade, but the actions of policy makers may pave the way for stronger growth.

New companies are lining up to enter the solar grid market, with an increasing number of development projects and a large number of low-cost financing. But a lack of investment in grid infrastructure could hinder investors.

Decades of underinvestment in power grids and cumbersome connectivity have put global markets on the brakes. In order to achieve the investment level of solar photovoltaic, wind energy and energy storage needed to decarbonize the power market, policy makers will need to give priority to the construction of transmission and distribution networks.

Finally, at the 26th session of the conference of the parties to the United Nations Framework Convention on climate change, which will be held later this year in the UK, the goal of zero emission net will be achieved in the whole economic field. The positive outcome of the talks will lead financial institutions and investors to take more action to shift capital to zero carbon energy.

Conversely, some of the world’s largest energy companies, which have so far (at best only just begun to enter the solar photovoltaic market), are likely to double their commitment. This could change the industry as a whole.