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Global Market

Outlook

For Solar Power

2021 - 2025 Supported by:

10 IEA (2020): World Energy Outlook 2020.

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Global Market Outlook For Solar Power 2021  2025 3

Foreword

Welcome to the Global Market Outlook for Solar Power 2021-2025.

Nobody could have predicted a year ago that solar would manage so smoothly through a devastating global pandemic,

and yet, despite the fact that COVID-19 has persisted longer than expected, global demand for solar did not shrink at

all. Instead, surprising us yet again, solar reached a new annual record of 18% growth, with 138 GW installed in 2020.

The success of solar is due to many factors. A primary one is its cost leadership, which continues to improve

without an end in sight. Another is its versatility: solar covers an unmatched spectrum of power applications

from very small residential systems to very large utility-scale plants, individual installations to building-integrated

solutions in carports, apartment houses or agricultural green houses. There are also mobile applications and

off-grid systems for rural electrification. Finally, no other power plant can be planned and built as rapidly as solar

PV, while at the same time involving the highest job intensity.

This solar market outlook sees much stronger growth for each of the coming years than anticipated in our previous

edition. While the deployment volume is somewhat limited due to COVID-19 and the silicon raw material shortage

in 2021, increasing vaccination rates in major solar markets and new silicon factories coming online will result in

additions of over 200 GW per year as of 2022, two years earlier than forecasted in last year’s GMO. The total solar

power generation fleet will boost capacities from about three quarters of a terawatt in 2020, to over 1 TW in 2022,

and nearly 1.9 TW in 2025, in our most realistic scenario. There is good reason why the International Energy Agency

(IEA), in its World Energy Outlook 2020 highlights that solar is the new king of electricity markets.

While China was the main growth driver in 2020, boosting its solar grid-connections by 60% to 48 GW, bringing

online about 2.5 times the capacity of the second largest market, the United States; we now have more markets

that installed 1 GW per year than ever before. In 2018, only 11 countries were in the GW-club, which grew to 18

in 2020, and will reach 29 by 2023.

One of the biggest solar surprises in the last two years was Vietnam, the world’s third largest solar market in

2020. Two attractive incentive schemes had the country first develop in just one year a vibrant GW-level utility

scale market, followed in 2020 by the creation of a gigantic solar rooftop market, kick-starting the segment

from basically nil to over 9 GW, with 6.9 GW connected to the grid in December alone. This example shows how

fast the solar industry can execute under the right framework conditions.

Except for COVID-19 impacted 2020, we have seen in the past and expect in the future double-digit growth

also in the off-grid solar market, a field we are covering for the first time in our Global Market Outlook. With the

support of GET.invest we started a research project to address the vast market of close to 10% of the global

population without access to electricity.

However, it would be a big mistake to sit back and enjoy the coming years of solar growth. A recent industry poll

on COVID-19 by the Global Solar Council shows that the majority of respondents were not overly happy with

the emergency stimulus offered to the solar sector during the crisis as well as the post-crisis recovery funds,

even though satisfaction rates increased. Indeed, our pre-pandemic released GMO 2019 forecasted somewhat

higher installation levels in 2020 than we actually saw happening. The pandemic did slow down solar growth at

a time when every additional solar watt counts.

While it is certainly a cause for celebration that solar keeps surprising us with larger installation numbers,

considering the fact that around 70% of global power still comes from non-renewable polluting energy and global

carbon dioxide emissions are set this year for their second biggest increase in history, solar power needs more

support from policymakers. Only much higher ambition and appropriate policy frameworks will enable the industry

to accelerate deployment in order to tap the full potential of solar - and meet the Paris Agreement target.

We want to express sincere gratitude to all contributors and supporters of this globally-produced solar market

outlook that would not have been possible without all the different helping hands.

Enjoy reading our Global Market Outlook.

WALBURGA

HEMETSBERGER

CEO, SolarPower

Europe

MICHAEL SCHMELA

Executive Advisor,

SolarPower Europe

GIANNI CHIANETTA

CEO, Global Solar

Council

Thanks to our Sponsor Members:

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GlobalMarketOutlookForSolarPower2021-2025Supportedby:10IEA(2020):WorldEnergyOutlook2020.©CWF—ThemountingsystemofthissolarfieldhasbeendesignedandmanufacturedbyCWFWithitsuniquecompositionandprotectiveperformance,Magnelis®istheleadingcoatedsteelforsolarmountingstructures.Forracksandpurlins,Magnelis®steel(ZM310)offersanexpectedlifetimeofmorethan30yearsinC3environments.Thisperformancehasbeencertifiedbyindependentbodies.Magnelis®steel(ZM430)canbeusedforfoundationsinsoilorconcrete.Aguaranteeupto25yearsispossiblebaseduponalocalsoilanalysis.ProtectedbyMagnelis®industry.arcelormittal.com/magnelisAsyourinvestmentdeservesalonglifeMagnelis®GlobalMarketOutlookForSolarPower2021-20253ForewordWelcometotheGlobalMarketOutlookforSolarPower2021-2025.Nobodycouldhavepredictedayearagothatsolarwouldmanagesosmoothlythroughadevastatingglobalpandemic,andyet,despitethefactthatCOVID-19haspersistedlongerthanexpected,globaldemandforsolardidnotshrinkatall.Instead,surprisingusyetagain,solarreachedanewannualrecordof18%growth,with138GWinstalledin2020.Thesuccessofsolarisduetomanyfactors.Aprimaryoneisitscostleadership,whichcontinuestoimprovewithoutanendinsight.Anotherisitsversatility:solarcoversanunmatchedspectrumofpowerapplicationsfromverysmallresidentialsystemstoverylargeutility-scaleplants,individualinstallationstobuilding-integratedsolutionsincarports,apartmenthousesoragriculturalgreenhouses.Therearealsomobileapplicationsandoff-gridsystemsforruralelectrification.Finally,nootherpowerplantcanbeplannedandbuiltasrapidlyassolarPV,whileatthesametimeinvolvingthehighestjobintensity.Thissolarmarketoutlookseesmuchstrongergrowthforeachofthecomingyearsthananticipatedinourpreviousedition.WhilethedeploymentvolumeissomewhatlimitedduetoCOVID-19andthesiliconrawmaterialshortagein2021,increasingvaccinationratesinmajorsolarmarketsandnewsiliconfactoriescomingonlinewillresultinadditionsofover200GWperyearasof2022,twoyearsearlierthanforecastedinlastyear’sGMO.Thetotalsolarpowergenerationfleetwillboostcapacitiesfromaboutthreequartersofaterawattin2020,toover1TWin2022,andnearly1.9TWin2025,inourmostrealisticscenario.ThereisgoodreasonwhytheInternationalEnergyAgency(IEA),initsWorldEnergyOutlook2020highlightsthatsolaristhenewkingofelectricitymarkets.WhileChinawasthemaingrowthdriverin2020,boostingitssolargrid-connectionsby60%to48GW,bringingonlineabout2.5timesthecapacityofthesecondlargestmarket,theUnitedStates;wenowhavemoremarketsthatinstalled1GWperyearthaneverbefore.In2018,only11countrieswereintheGW-club,whichgrewto18in2020,andwillreach29by2023.OneofthebiggestsolarsurprisesinthelasttwoyearswasVietnam,theworld’sthirdlargestsolarmarketin2020.TwoattractiveincentiveschemeshadthecountryfirstdevelopinjustoneyearavibrantGW-levelutilityscalemarket,followedin2020bythecreationofagiganticsolarrooftopmarket,kick-startingthesegmentfrombasicallyniltoover9GW,with6.9GWconnectedtothegridinDecemberalone.Thisexampleshowshowfastthesolarindustrycanexecuteundertherightframeworkconditions.ExceptforCOVID-19impacted2020,wehaveseeninthepastandexpectinthefuturedouble-digitgrowthalsointheoff-gridsolarmarket,afieldwearecoveringforthefirsttimeinourGlobalMarketOutlook.WiththesupportofGET.investwestartedaresearchprojecttoaddressthevastmarketofcloseto10%oftheglobalpopulationwithoutaccesstoelectricity.However,itwouldbeabigmistaketositbackandenjoythecomingyearsofsolargrowth.ArecentindustrypollonCOVID-19bytheGlobalSolarCouncilshowsthatthemajorityofrespondentswerenotoverlyhappywiththeemergencystimulusofferedtothesolarsectorduringthecrisisaswellasthepost-crisisrecoveryfunds,eventhoughsatisfactionratesincreased.Indeed,ourpre-pandemicreleasedGMO2019forecastedsomewhathigherinstallationlevelsin2020thanweactuallysawhappening.Thepandemicdidslowdownsolargrowthatatimewheneveryadditionalsolarwattcounts.Whileitiscertainlyacauseforcelebrationthatsolarkeepssurprisinguswithlargerinstallationnumbers,consideringthefactthataround70%ofglobalpowerstillcomesfromnon-renewablepollutingenergyandglobalcarbondioxideemissionsaresetthisyearfortheirsecondbiggestincreaseinhistory,solarpowerneedsmoresupportfrompolicymakers.Onlymuchhigherambitionandappropriatepolicyframeworkswillenabletheindustrytoacceleratedeploymentinordertotapthefullpotentialofsolar-andmeettheParisAgreementtarget.Wewanttoexpresssinceregratitudetoallcontributorsandsupportersofthisglobally-producedsolarmarketoutlookthatwouldnothavebeenpossiblewithoutallthedifferenthelpinghands.EnjoyreadingourGlobalMarketOutlook.WALBURGAHEMETSBERGERCEO,SolarPowerEuropeMICHAELSCHMELAExecutiveAdvisor,SolarPowerEuropeGIANNICHIANETTACEO,GlobalSolarCouncilThankstoourSponsorMembers:GlobalMarketOutlookForSolarPower2021-20254Projectmanager&leadauthor:MichaelSchmela,SolarPowerEurope.Marketintelligence:ChristopheLits,RaffaeleRossi&MichaelSchmela,SolarPowerEurope.Internalco-authors:BenjaminClark,MátéHeisz,ChristopheLits&RaffaeleRossi,SolarPowerEurope.Externalco-authors::AbigailRossHopper,SolarEnergyIndustriesAssociation(SEIA);GIZEnergySupportProgram;JapanPhotovoltaicEnergyAssociation(JPEA);SteveBlume,SmartEnergyCouncil(SEC);TussharSharma&SubrahmanyamPulipaka,NationalSolarEnergyFederationofIndia(NSEFI);RodrigoLopesSauaia&RicardoLacerdaBaitelo,BrazilianPhotovoltaicSolarEnergyAssociation(ABSOLAR);PeterMolengraaf&AmelieVeenstra,HollandSolar;JoséDonoso&AlejandroLabanda,UniónEspañolaFotovoltaica(UNEF);PaulinaWojciechowska,PolskieStowarzyszenieFotowoltaiki(PSF);JaimePérezdeLaborda,MexicanAssociationofSolarEnergy(Asolmex);ArtemSemenyshyn,SolarEnergyAssociationofUkraine(ASEU);NiveshenGovender,SouthAfricanPhotovoltaicIndustryAssociation(SAPVIA);CécileHeneffe,Fédérationdesénergiesrenouvelables(EDORA);WannesDemarcke,&EllenVanMello,OrganisatieDuurzameEnergie(ODE);MarieBuchet,SyndicatdesEnergiesRenouvelables(SER);FrancescoLuise&JamesOsborne,GlobalSolarCouncil(GSC).Externalcontributors:Sungy(DZ),CADER(AR);PVAUSTRA(AT);APSTE(BG):CanREA(CA);ACESOL(CL);ACERD(CD);OIE(HR);Solárníasociace(CZ);DanskSolcelleforening(DK);LUTUniversity&Fortum(FI);Enerplan(FR);BSW-Solar(DE);HELAPCO(GR);MANAP(HU);ISEA(IE);GEA-IL(IL);ANIERinnovabili&ElettricitàFutura(IT);ILR(LU);NSEC(NO);APREN(PT);HevelSolar(RU);SAPI(SK);ZSFV(SI);UNEF(ES);SvenskSolenergi(SE);BFE&Swissolar(CH);TAREA(TZ);GÜNDER(TR);MESIA(UAE);SolarEnergyUK(GB);AfricanSolarIndustryAssociation(AFSIA);GOGLA.Textediting:LukasClark-Memler&MilenaKoot,SolarPowerEurope.Design:OnehemisphereAB,Sweden.Supportedby:IntersolarEurope,GlobalSolarCouncil(GSC).Pleaseciteas:SolarPowerEurope(2021):GlobalMarketOutlookforSolarPower2021-2025.Dateofpublication:July2021.ISBN:9789464073492.Contact:info@solarpowereurope.org.Methodology:SolarPowerEurope’sfive-yearforecastconsistsofLow,MediumandHighScenarios.TheMediumscenarioanticipatesthemostlikelydevelopmentgiventhecurrentstateofplayofthemarket.TheLowScenarioforecastisbasedontheassumptionthatpolicymakershaltsolarsupportandotherissuesarise,includinginterestratehikesandseverefinancialcrisissituations.Conversely,theHighScenarioforecaststhebestoptimalcaseinwhichpolicysupport,financialconditionsandotherfactorsareenhanced.Segmentationisbasedonthefollowingsystemsize:Residential(<10kW);Commercial(<250kW);Industrial(<1000kW);Utility-scale(>1000kW,ground-mounted).SolarPowerEurope’smethodologyincludesonlygrid-connectedsystems;aseparateoverviewofoff-gridsolarisprovidedinChapter2.InstalledcapacityisalwaysexpressedinDC,unlessotherwisestated.AllfiguresarebasedonSolarPowerEurope’sbestknowledgeatthetimeofpublication.Disclaimer:ThisreporthasbeenpreparedbySolarPowerEurope.Itisbeingfurnishedtotherecipientsforgeneralinformationonly.Nothinginitshouldbeinterpretedasanofferorrecommendationofanyproducts,servicesorfinancialproducts.Thisreportdoesnotconstitutetechnical,investment,legal,taxoranyotheradvice.Recipientsshouldconsultwiththeirowntechnical,financial,legal,taxorotheradvisorsasneeded.Thisreportisbasedonsourcesbelievedtobeaccurate.However,SolarPowerEuropedoesnotwarranttheaccuracyorcompletenessofanyinformationcontainedinthisreport.SolarPowerEuropeassumesnoobligationtoupdateanyinformationcontainedherein.SolarPowerEuropewillnotbeheldliableforanydirectorindirectdamageincurredbytheuseoftheinformationprovidedandwillnotprovideanyindemnities.Unlessotherwisestated,thecopyrightandotherintellectualpropertyrightsofmarketintelligencedataandresourcesprovidedareownedbySolarPowerEurope.TableofcontentsForeword3Executivesummary51Globalsolarmarket7Update2000-202012Prospects2021-202524Segments2021-2025332Off-gridsolar37TrendsWhat’scoolinsolartechnology63HighlightCOVID-19impactsonsolar733GW-scalesolarpowermarketsin2020774GlobalMarketOutlookforsolarpower132GlobalMarketOutlookForSolarPower2021-20255ExecutivesummaryDespitethesevereimpactoftheCOVID-19pandemicacrosstheworldin2020,theyearstillsaw138.2GWofsolarinstalled,representingan18%growthcomparedto2019,yetanotherglobalannualinstallationrecordforthesolarPVsector.Thisbringstheglobalcumulativesolarcapacityto773.2GW,a22%increase,andmarksanewmilestoneforthesolarsectorbyexceedingthreequartersofaterawatt.Thissurprisinglystronggrowthhelpedsolarmaintainitsdominanceamongallnewlyinstalledpowergeneratingtechnologies,reachinga39%globalshare,whichtranslatesintotheimpressivefactthatmorethaneverythirdpowerplantunitinstalledin2020camefromsolar.Atthesametime,solar’stotalpowergenerationshareincreasedby0.5percentagepointstoaround3.1%,withnearly70%stillcomingfromfossilfuelandnuclear,highlightingtheneedtorapidlyacceleratesolardeployments.Thegoodnewsisthatsolar’scostcompetitivenessprogressedfurtherin2020,resultinginanevenwiderspreadtoconventionalgenerationtechnologiesasthecostofgas,coal,andnuclearincreased.Solar’scostimprovedacrosstheboardforallsegmentswithutility-scalesolarnowsuperiortofossilfuelsinallunsubsidisedinvestmentcases,whichalsoappliestosolar+storageusedtomeetpeakdemandcomparedtogaspeakers,accordingtoinvestmentbankLazard.Thestrengthofsolarcouldbeobservedinmanytendersin2020,whereseveralwinningbidsindifferentgeographicalregionsoutperformedtherecordlowofthepreviousyear.At1.32USDcents,the2020globalrecordbidinthesecondPortugueseauctionwasapproximately20%lowercomparedtothe2019record,whichwasalsoachievedinPortugal.ThestrongperformanceofChina,growingby60%to48.2GW,easilyovercompensatedforIndia’slossesin2020,pushingupdemandforsolarintheAsia-Pacificregiontoaglobalshareof62%.WhileanexceptionallygoodyearforsolarintheUnitedStatescarriedtheAmericastoahighershareof19%,Europe’sslowergrowthratethantheglobalaveragemeantamarketsharereductionto17%.DespiteChina’smarketgrowth,thenumberofvolumemarketsenteringtheGW-levelhasonlymarginallyincreasedto18in2020,upfrom17theyearbefore.Inthefirsthalfof2021,thesolarsectorwascharacterisedbyincreasingcostsforwafer,cell,andmodulemanufacturers,primarilyduetorisingsiliconpricesbecauseofasupplyshortage.COVID-19affectedseveralmajorsolarmarkets,inparticularIndia.However,aGlobalSolarCouncilpollontheimpactsofthepandemiconthesolarsectorshowedanimprovingindustryoutlook,with81%ofrespondentsexpectingsalestogrowin2021comparedto72%in2020(seeChapter‘COVID-19impactsonsolar’).DespitethevariouspriceincreasesalongthesolarvaluechainandthecontinuednegativeimpactofCOVID-19anditsvariants,solarwillseeanotherstellargrowthyearin2021.OurMediumScenarioanticipatesnewlyinstalledcapacitiestoincreaseby18%to163.2GW.Asvaccinationratesreachnecessarylevelsacrossthemajorsolarmarkets,andwiththesiliconsupplyissuesolved,thenextfouryearsareexpectedtobeverystrongforsolarpoweraroundtheworld.Foreachyearupto2025,wehaveconsiderablyincreasedourforecasts,but2022willstandout.InourMediumScenario,weseetheglobalsolarmarketincreaseby25%to203GWin2022,thefirsttimethatannualPVinstallationswillcrossthe200GWlevel,whichwehadpreviouslyexpectedtobeaccomplishedonlyin2024.Withcontinuedgrowthtoannualadditionsof266GWin2025,theoperatingglobalsolarpowergenerationportfoliowillreachcloseto1.9TW,andinthemostoptimisticscenarioevenexceedthe2TWlevelinfouryears’time.TheGlobalMarketOutlooktraditionallyhasfocusedongrid-connectedsolar.Inordertoofferaviewonthemuchsmallerbut,forhundredsofmillionsofpeoplearoundtheworld,existentially-importantoff-gridsector,wehaveextendedourresearchthisyeartoshowthatsolaroff-gridapplicationsacrossallsegments–smallscale,C&I,andmini-grids–areathrivingGW-scalemarketwithtwo-digitgrowthratesforthecomingyears.SolarPowerEurope–LeadingtheEnergyTransitionSolarPowerEuropeisamember-ledassociationthataimstoensurethatmoreenergyisgeneratedbysolarthananyotherenergysourceby2030.www.solarpowereurope.orgJoin200+InfluenceIntelligenceNetworkDiscountsVisibilityEuropemembersSolarPowerGlobalMarketOutlookForSolarPower2021-20257Globalsolarmarket1In2020,ayeartheworldsufferedfromaseverehealthandeconomiccrisis,solarwasagainthepowergeneratingtechnologywiththehighestnetinstalledcapacity,witha39%shareofallnewinstallationsfortheyear(seeFig.1).Thisismorethantwiceasmuchasallnewfossilfuelcapacitycombined.Likenuclear,coaldoesnotevenappearonthechartanymore,asitsdecommissionedcapacityoutweighsnewinstallations.Despiteitsconsiderablegrowthratein2020,solar’sdominancedecreasedcomparedtotheyearbefore,whenittook48%ofallnewenergycapacity.Butthisismostlyduetoanexceptionalyearforthewindenergysector,whichgrid-connectedahithertounseenrecordlevelof114GW,basedonavolumefromChinawheretheendofitsFITsubsidyprogrammeforonshorewindtriggeredarushmuchlargerthanexpected.Whensummingupallnewrenewablepowergenerationcapacityshares,weseeasteadyupwardtrendinrecentyears.In2020,83%ofnewinstalledcapacitybelongedtorenewabletechnologies,upfrom59%in2016.160MW,Atacamadesert,Chile.©SoltecFIGURE1NETPOWERGENERATINGCAPACITYADDEDIN2020BYMAINTECHNOLOGYOtherRE:18GW;5%Hydro:21GW;6%Gas:59GW;17%Wind:114GW;33%Solar138GW;39%2020SOURCE:IEA(2021).©SOLARPOWEREUROPE20211Globalsolarmarket/continuedGlobalMarketOutlookForSolarPower2021-20258Whilesolar’sleadershipinannualglobalinstallationsforthelastfewyearsisindeedaverypositivedevelopment,thisneedstobetakenintoperspective.Solarwasabletoincreaseitsshareamongoperatingpowergenerationplantsby1.5percentagepointslastyear,butthetotalcapacityamountedtoonly10%bytheendof2020.Intermsofactualoutput,solarimprovedby0.5percentagepointsyear-on-year,butcumulativelyitbarelygenerated3.1%oflastyear’sglobalpowerproduction(seeFig.2).Thisisalsovalidforrenewablesasawhole,whichimprovedby2.3percentagepointsto39%oftotalgenerationcapacities,andby0.9percentagepointsto29%oftheworld’stotalpowergeneration.Thegoodnewswhentakingamuchbiggerandlongerperspectiveisthatsolar’sshareofthemarketiscontinuouslyincreasing.Andwithnoendforimprovementsincostcompetitivenessinsight,thepotentialforsolarpowerisonlygrowing.FIGURE2SOLARANDRENEWABLEPOWERASASHAREOFGLOBALPOWER2015-20200102030405060708090100%201520162017201820192020OtherREpowerasa%ofglobalpowergenerationNon-REpowerasa%ofglobalpowergenerationSolarpowerasa%ofglobalpowergenerationSolarcapacitychangeasa%ofglobalcapacityadditions(net)REcapacitychangeasa%ofglobalcapacityadditions(net)62%59%68%73%80%83%21%30%34%42%48%39%1.0%22%23%23%24%26%22%1.3%1.8%2.2%2.6%3.1%SOURCE:IRENA(2021);IEA(2021);SPEestimates.REcapacityincludeslargehydro.©SOLARPOWEREUROPE2021GlobalMarketOutlookForSolarPower2021-20259regionsaroundtheworld.ThelatestLevelisedCostofEnergy(LCOE)analysis,version14.0,publishedinOctober2020byUSinvestmentbankLazard,illustrateshowthedownwardtripofutility-scalesolarcosthasprogressedbyafurther8%comparedtothepreviousyear.Thespreadwithconventionalgenerationtechnologiesiswidening,consideringthatthecostofgas,coalandnuclearallwentup.Thereisavarietyofreasonstoexplainsolar’sglobalsuccessstoryoverotherpowergenerationtechnologies,butacrucialfactorhasbeenitsrapidcostreductionoverthelastdecade,thankstowhichsolarhasclearlybecomethecostleaderaroundtheworld(seeFig.3).Whilethecostofsolarhasbeenlowerthanfossilfuelandnucleargenerationforseveralyears,itisalsonowlowerthanwindinmanyFIGURE3SOLARELECTRICITYGENERATIONCOSTINCOMPARISONWITHOTHERPOWERSOURCES2009-2020050100150200250300USD/MWh374059112163200920102011201220132014201520162017201820192020CCGTSolarWindCoalNuclearSOURCE:Lazard(2020).HistoricalmeanunsubsidisedLCOEvalues(nominalterms,post-tax).©SOLARPOWEREUROPE2021Alookatthedifferentsolarsegmentscomparedtonewconventionalpowergenerationsourcesshowsthatutility-scalesolartodayischeaperthanfossilfuelandnuclearpowersourcesinanyunsubsidisedcase(seeFig.4).Moreover,thecost-competitivenessofsolar+storageversusgasturbinesusedtomeetpeakdemandhasimprovedfurther,withthelowerendoftheLCOErangedecreasingby21%yearonyear.Withthisasthebackground,manycountriesaroundtheworld–includingPortugal,Germany,IndiaandtheUnitedStates–havelaunchedhybridrenewableauctions,wherebytheco-locationofvariousrenewablesourcesplusbatterystorageprovideaflexiblesolutiontotheirenergyneeds.TendersThepowertenderresultsbearwitnesstotheever-growingcompetitivenessofsolarenergy.Throughout2020,again,record-breakingbidswereannouncedacrosstheworld,withawardedsolarenergypriceshittingnewlows(seeFig.5).If2019wastheyearwhichsawbidsbelowthe2USDcentslevelhappenmultipletimesandindifferentcontinents,2020sawthedownwardtrendcontinue,withtwoawardedbidsevenbelow1.5USD.Interestingly,thesetwotendersoccurredinthesamecountriesthathadsecuredthebestbidperformancein2019–PortugalandtheUAE.1Globalsolarmarket/continuedGlobalMarketOutlookForSolarPower2021-202510FIGURE4SOLARELECTRICITYGENERATIONCOSTINCOMPARISONWITHCONVENTIONALPOWERSOURCES2020050100150200250LCOE(USD/MWh)ResidentialPVC&IPVUtility-scalePVCCGTCoalNuclearUtility-scalePV+storageGaspeakerSOURCE:Lazard(2020).Nominalterms,post-tax.©SOLARPOWEREUROPE2021Portugal’s2ndsolarenergyauctionbroughtthelowestpricein2020,at1.32USDcents/kWh.Thisismorethan0.3centslowerthanlastyear’srecord-settingwinningbidof1.65USDcents/kWh.Suchalowpricecanbepartiallyexplainedbythetenderdesign.First,onlyapartoftheelectricitygeneratedbytheprojectswillbesoldthroughthepowerpurchaseagreement,withtherestbeingofferedtothemerchantmarket.Second,andcrucially,developerswereawardedgridconnectionpermissionsinacountrycharacterisedbyhighgridcongestion,andthattooforanindefiniteperiodoftime.SecuringaccesstolandinPortugalprovedtobeadriverstrongenoughtobringdownpricessodramatically.TheotherexceptionallowwasinAprilof2020,whenAbuDhabi’s1.5GWsolartenderdrewtherecordlowbidatthetime,at1.35USDcent/kWh,whichis0.25centslowerthanthecountry’sDubairecordbidin2019.Threeothertendersawardedin2020almostreachedthe1.5USDmark.A100MWsolarPPAprojectsignedinNewMexicoreached1.5USDcents/kWh–althoughitbenefitsfromtheUSInvestmentTaxCreditscheme.OtherremarkableresultswereachievedinQatar’s800MWauction(1.57USDcents/kWh,anotherworldrecordatthetime),andSaudiArabia(300MW,1.61USDcents).Itisnosurprisethatcountriesblessedwithhighsolarirradianceandsupportedbyastablepolicyframeworkcanachieveverycompetitiveprices.However,whilepolicystabilityandhighcreditratingscertainlyfavourlowsolarprices,therehasbeenanincreasingnumberofexamplesinrecentyearsshowingimpressivelylowPPAsindevelopingcountriesaswell.Thankstothesupportofinternationallenders,aboveallinternationaldevelopmentbanks,solarprojectscanmitigatetheirfinancialrisks.Forexample,Albania’s140MWtenderin2020,assistedbytheEuropeanBankforReconstructionandDevelopment,sawawinningbidof2.74USDcents/kWh.GlobalMarketOutlookForSolarPower2021-202511FIGURE5SELECTIONOFLOWESTSOLARAUCTIONBIDSAROUNDTHEWORLDIN202001234UScents/kWhPortugalUAENewMexico,USAQatarSaudiArabiaIndiaIndiaAlbaniaIndiaMyanmar1.321.351.501.571.612.692.722.743.153.48PPAwithInvestmentTaxCredit.©SOLARPOWEREUROPE2021UPDATE2000-2020In2020,atotalof138.2GWsolarwasinstalledacrosstheworld,representingan18%growthoverthe117.6GWaddedtheyearbefore(seeFig.6).Inayearcharacterisedbyaglobalpandemic,solardemandshowedstrongresilience,andmuchstrongerthananticipatedinourpreviousGMO,publishedinJune2020.Atthetime,wewerethemostoptimisticamongthemarketanalysts,forecastingtheglobalsolarsectortoadd112GWinourMediumScenario,whichwouldhavemeanta4%year-on-yearmarketdecline.Theactualnumberof138.2GW,however,wasveryclosetothetopendofourHighScenario,whichwehadforecastedat138.8GWwiththefollowingreasoning:“Itsoundsextremelyoptimisticandisalsoimprobable;butthedevelopmentofsolarhasbeenfullofsurprisesinthepast.Again,thebiggestwildcardisChina,whichhasabiglevertomovethesolarbalanceinanydirection.”Indeed,theworld’slargestsolarmarketsurprisedwithstronggrowthin2020,adding18GWmorethanthepreviousyear.Positivesolarmarketdynamicscouldbeobservedinmanyothercountriesandmostglobalregionsaswell,theUSandEuropeinparticular,whichwerehitexceptionallyhardbyCOVID-19in2020.TOP10GlobalSolarMarketsThetop10solarmarketsin2020remainedmostlythesameasin2019,exceptforonenewaddition,butmanypositionschangedduetounexpectedgrowthdynamics(seeFig.7).Chinaremainedthemarketleaderin2020,addingovertwiceasmuchsolarpowercapacitythanthesecond-largestmarket,andasmuchasthefollowing5majormarketscombined.After2yearsofmarketdecline,theChinesemarketexcelledwithadditionsof48.2GWin2020,a60%growthrateoverthe30.1GWinstalledin2019.The2020resultsarethesecondbesteverforChina,justfallingshortofitsall-timerecordof52.8GWin2017.AffectedbytheCOVID-19pandemicinH1/2020,andstillworkingonitstransformationtoturntheformerincentiveschemebasedonuncappedandattractivefeed-intariffsintoaframeworkbasedonauctionsandsubsidyfreesystems,Chinesesolarinstallationactivitiestookplace1Globalsolarmarket-Update2000-2020GlobalMarketOutlookForSolarPower2021-202512FIGURE6ANNUALSOLARPVINSTALLEDCAPACITY2000-2020020406080100120140160GWEuropeAMERAPACChinaMEA2000200120022003200420052006200720082009201020112012201320142015201620172018201920203%13%138.218%©SOLARPOWEREUROPE2021mostlyinthelatterpartoftheyear.Ofthe2020total,29.5GWweregrid-connectedinthefourthquarter,with23.3GWgoingonlineonlyinDecember.Thereason:harddeadlinessetinthesubsidyprogramsmeantthatalargevolumeofprojectshadtobeinstalledbyyear-endtoavoidpenaltiesfordelays.Asthesanctionlevelsweresignificant,developerstriedtobeatthedeadlinesdespitethepriceincreasesforsolarglassandothersolarmodulecomponents.China’ssolargrowthcontinuedtorelymainlyonutility-scaleprojects,butmaterialsubsidiesofferedforresidentialsystemsledtoaround10GWofgrid-connectedPVinstallationsonhomes.TheUnitedStatesgearedupitssolarambitionsin2020,doublingitsgrowthrateto43%overthepreviousyear,resultingin19.2GWofnewinstalledcapacities.Butevenifithadnotgrownatall,the13.5GWaddedin2019wouldhavebeensufficienttokeepitssecondrank.Themaingrowthdriverwasagainthedecreasingfederalsolarinvestmenttaxcredit(ITC),whichhaddroppedfrom30%in2019to26%in2020,andwasscheduledtodropfurtherto22%in2021.AnextensionoftheITCpassedendofDecemberhadnoimpacton2020installations;thefourthquarter,adding8GW,wasthebestsolarquartereverintheUS.Traditionally,utility-scalesolarhasbeenthelargestPVsegmentintheUS,andlastyearitwasevenmoredominant,accountingforalmosttheentiregrowthofitssolarsector.Whileutility-scalewasresponsiblefor81%ofthenewlyinstalledcapacity,residentialgrewby‘only’11%,downfrom18%in2019,andcontributionsfromtheC&Isegmentevendroppedby4%.TheworseperformanceoftherooftopsegmentwasmainlyduetoCOVID-19.However,onthepositivesidewereagainthesolardevelopmentsinthecorporatesourcingsegment.Closeto11.9GWofthe23.7GWofrenewablePPAssignedin2020weinkedintheUS,accordingtoBloombergNEF.Thenamefortheworld’sthirdlargestmarketbelongstothebucketofbiggestsurprisesinthesolarsectorin2020.Vietnaminstalled11.6GW,nearlydoublingfrom6.4GWin2019,whichwasalreadyahugesurprisethatplaceditfifthonthelistoftheworld’slargestsolarpowermarkets.TheAsiancountrydidnotevenfigureontheglobalon-gridsolarmapbefore2019,withonlyameasly97MWinstalledin2018.Whilethe2019momentumstemmedfromaveryGlobalMarketOutlookForSolarPower2021-202513FIGURE7TOP10SOLARPVMARKETS,2019-20200102030405060GW20202019ChinaUnitedStatesVietnamJapanGermanyAustraliaSouthKoreaIndiaSpainBrazil48.219.211.68.24.95.14.13.93.53.230.113.56.47.03.94.43.18.84.82.1©SOLARPOWEREUROPE2021attractiveanduncappedfirstfeed-intariffscheme,offering20-yearFiTcontractsfor9.35UScents/kWhthattriggeredabigrunagainstaprogramendinmid-2019,the2020boomwasbuiltontherooftopsolarsegment.Thesecondfeed-intariffprogrammewaseligibleforground-mountsolar,floatingPV,rooftopsystems–withthelatterofferedFiTlevelsthatwereslightlyhigherthantheaverageretailelectricityprices.ValidfromMayuntiltheendof2020,thisattractiveoffertriggeredarushofinstallations,kick-startingtherooftopmarketfrombasicallyniltoover9GW,with6.9GWconnectedtothegridinDecemberalone.Japanmaintaineditsfourthrank,afteradding8.2GWin2020,up17%fromthe7GWconnectedin2019.ThisisthesecondyearthatJapan’snewlyinstalledsolarcapacityincreased,albeitonlyslightly.Followingitsinstallationrecordof10.8GWin2015,Japansawdemanddeclineforthreeconsecutiveyears.Again,theuptickcamepartlyfromtimepressureonapprovedlarge-scaleFiTprojectsthatneededtobeinstalledbytheendofthefiscalyearinMarch2020.Asthefeed-intarifferahascometoanend(about1.8GWnewFiTprojectswereapprovedin2020),someofthenewincentivetoolsareslowlygettingtraction.Auctionsin2020continuedtobeundersubscribedbutsuccessratesfinallywentup–nearlyhalfofthe750MWofferedinthe6thauctionwasawardedinDecember.ThereisagrowinginterestfromcorporatesinrenewablePPAs,andself-consumptionsystemsarealsostartingtoseedemandwithsolarpowerreachingcompetitivelevelswithvariableelectricitypricesintheC&Isegment.Australia’s2020solarmarketperformancetrendlinesurprisinglyshowedanotheruptickin2020.A15%annualgainof0.7GWledtoatotalof5.1GWofnewlydeployedcapacities–anewinstallationrecordforthe1Globalsolarmarket-Update2000-2020/continuedGlobalMarketOutlookForSolarPower2021-202514countrywiththelargestsolarpowerinstalledpercapita.Italsomeantabetterrankingamongglobalsolarmarkets,findingitselfwithinthetop5frombeingplaced7thin2019.Difficultbusinessconditions,partlycausedbyCOVID-19,hamperedworkintheindustrialandutility-scalesegments,butverystronginterestinresidentialrooftopsystemsmorethancompensatedforthedeclineofthelarge-scalesolarbusiness.HomeownersoptingforsolarstillprofitedfromthenationalRenewableEnergyTarget(RET)programme’sSmall-scaleRenewableEnergyScheme,butthedrivershavealreadystartedtochange–withconsumersincreasinglystrivingforhighself-consumptionrates.WhiletheRETLargescaleGenerationCertificatesScheme(LGC)endedin2020,utility-scalesolarsufferedfromregulatoryuncertaintyandgridconnectionissues.However,intheabsenceofamissingrenewablevisionfromthefederalgovernment,Australia’sstateshavebeenincreasinglytakenover,introducingseveralsupportpoliciestospeedupthecountry’senergytransition,suchasNewSouthWales,whichpublishedanElectricityInfrastructureRoadmapfor12GWofnewtransmissioncapacitywiththegoaltotriggerupto32billionAUD(23.4billionUSD)inprivateinvestments.Germanyperformedabigjumpinthesolarmarketrankingsin2020,nowplacedat#6,upfrom#9in2019.Allitneededwastheinstallationofjustabove1GWoveritspreviousannualaddition.Europe’slargestsolarmarketgridconnected4.9GWin2020,upfrom3.9GWin2019.Backedbyaprofoundfeed-inpremiumschemeandregulartendersforsystemslargerthan750kW,rooftopinstallationsremainedthebackboneofGermany’ssolarindustry.DespiteCOVID-19,residentialrooftopinstallationsdoubledtheirsharetooveraquarterin2020asthegovernmentkeptDIYstoresopenandcraftsmenatwork.Economicallyveryappealinginanenvironmentofveryhighresidentialelectricityretailprices,self-consumptionsolarsystemshavebeenincreasinglyattractinghomeowners,whocombinetheirsolarinvestmentnowmostlydirectlywithabatterystoragesystem.Adecreaseinthefeed-inpremiumschemeforC&IrooftopsystemsimplementedinJanuary2021hadthismainpillarofGermany’ssolarsectorgrowonlylittleto2.9GWlastyear.Ontheotherhand,anincreaseinthetendervolumein2019ledtomoreground-mountcapacity,whichwasalsobackedbyPPAsystems,includingGermany’slargestsolarpark,a187MWsubsidy-freePVpowerplantthatwentpartlyonlinein2020.SouthKorea’ssolarmarketgrewby31%to4.1GW,breakingthe4GWannualinstallationlevelbarrierforthefirsttime.ThemaindrivercontinuestobetheKoreanRenewablePortfolioStandardsscheme,whichwaslaunchedtoreplacethefeed-intariffandrequiresutilitycompanieswithgenerationcapacitiesexceeding500MWtosupplybetween6%and10%oftheirelectricityfromnewandrenewablepowersourcesby2023.Over90%ofthePVinstallationsinthecountryhavebeenunderthisprogramme.Giventhelimitationstoutility-scalepresentedbythecountry’smountainousterrain,SouthKoreafocussesonthedistributedsolarsegment,buthasalsobeenlookingatalternativesolutions.In2019,itannouncedtobuilda2.1GWfloatingsolarplant,whichwouldbetheworld’slargest.Iftherewasonecountrythatwasamajordisappointmentamongtheworldleadingsolarmarkets,itwasIndia.Thesub-continentinstalledamere3.9GWin2020,down56%from8.8GWin2019,andeven7.6GWlessthaninitsrecordyear2017afterwhichdemandconstantlydeclined.WhileCOVID-19wasthemajormarketconstrainingfactorlastyear,therecontinuestobethenaggingissueofelectricitydistributioncompanies’(Discoms)unwillingnesstosignpowersaleagreements.Inseveralstates,tenderswerecancelledorwinningPPArenegotiated.Anotherbigchallengeremainstherooftopmarket,whichshouldcontribute40GWtoIndia’s100GWsolargoalbyendof2022.Butin2020,thissegmentevendeclinedtoonlyaround20%ofthenewlyinstalledcapacities,addingtoatotaloflessthan1GWofrooftopsolardeployed.Spaindropped3placestorank9withanestimatednewlyinstalledcapacityofaround3.5GW,down26%fromaround4.8GWlastyear.Nearly4GWofthe4.2GWground-mountedpowerplantcapacityinstalledin2019mostlystemmedfromtwotendersin2017.Butin2020,therewerenonewvolumesfromadditionaltenderstobedeployed.Instead,alargeshareofthe2020installationscamefromPPAbasedsystemsoutofa100GW+pipelineunderGlobalMarketOutlookForSolarPower2021-202515developmentinSpain.Thismakesthecountryprobablytheworld’slargestmarketforsubsidy-freesolar,whileshowingatthesametimethatgridconstraintscandramaticallyslowdowntheinstallationpaceforsolarpowerplants.Spain’sself-consumptionrooftopmarketonlyopenedinearly2020aftertheabolishmentoftheSunTax,whichhadkeptthatsegmenteconomicallyunattractiveinthepast.ButthenewandattractivebusinessopportunitywaslimitedbyCOVID-19,whichhitSpainextraordinarilyhardandresultedinadireeconomicsituationformanySMEs.Still,C&Iandresidentialtogethercontributedaround715MWtoSpain’ssolardeploymentin2020,a30%growthcomparedtotheyearbefore.Brazilenteredthetop10rankingforthefirsttimeandistheonlyLatinAmericancountryinthatgroup.The3.2GWgrid-connectedin2020isanewannualrecordanda49%improvementoverthe2.1GWaddedin2019.The2020numberwouldhavebeenlikelyevenhigherifthepandemichadnotstruckthecountrysobad.Around2.5GW,thebulkoflastyear’sinstallations,stemsfromdistributedsolarsystemsupto5MWthatcanaccessanationalnetmeteringscheme.TheotherlegofthesolarsectorinBrazilin2020werecentralisedsystemsfromenergyauctionsforlarge-scalepowerplants,mainlyin2017,andsomePPAbasedsystems.Insummary,2020wasanimpressiveyearofgrowthforsolar,evenmorewhentakingintoconsiderationthesevereimpactsofthepandemiconmanycountriesacrosstheglobe.ThegrowthwascarriedtoalargeextentbyglobalmarketleaderChina(seeFig.8).ButmanycountriesaroundtheworldshowedstrongresiliencetoCOVID-19,performingmuchbetterthanforecastedbysolaranalystsacrosstheboard.In2020,18countriesaddedover1GW,comparedto16in2019and11in2018,showinghowdiversificationofthesolarsectorbeginstounfoldintomarketswithnotablevolumes.Detailsonthese18GWmarketscanbefoundinChapter3,wherenationalandregionalindustryassociationsactiveinthesolarsectorprovidetheirmarketanalysisonthesemarkets(seep.77).1Globalsolarmarket-Update2000-2020/continuedGlobalMarketOutlookForSolarPower2021-202516FIGURE8TOP10COUNTRIESSOLARSHARE2020RestofWorld;19%Brazil;2%Spain;3%India;3%SouthKorea;3%Australia;4%Japan;6%Vietnam;8%Germany;4%UnitedStates;14%China;35%138.2GW2020©SOLARPOWEREUROPE2021RegionalUpdateThestrongperformanceofChinainparticularmorethancompensatedforIndia’slosses,pushingupdemandforsolarintheAsia-Pacificregion(seeFig.9).Throughtheadditionof84.9GW,theworld’slargestsolarregionexpandeditsdominanceby4percentagepointstoaglobalshareof62%.ThismeansahaltonthedownturnoftheprevioustwoyearscharacterisedbyChina’sweaknessthatfolloweditsrecordyearin2017,whenthreequartersoftheglobalsolarcapacitywasinstalledinAsia-Pacific,and52%inChinaalone(notethatduetoitslargesize,ChinaislistedseparatelyfromtheAsia-Pacificregion).In2020,Asia-Pacificwasagainhometo6ofthetop10solarmarketsand7countriesthataddedGW-scalecapacities,unmatchedbyanyotherregion.WhenlookingatAsia-PacificexChina,theregion’ssolarmarketsharedroppedconsiderablyby5percentagepointsto27%in2020,addingalittlelesscapacitythantheyearbefore–36.7GW,comparedto37.1GWin2019.Thelosses–causedprimarilybyIndiafailingtomeetitsambitioustargetsandothershardlygrowing–weresosubstantialthatallnon-ChineseAsia-PacificcountriesputtogetherachievedalowerglobalsharethanChinaalone,whichexpandeditsmarketshareto35%.TheUSplaysanevenmoreimportantroleintheAmericasthanChinainAsia.Theworld’s2ndlargestmarketwasresponsiblefor74%of2020additionsontheAmericanContinent,upfrom66%in2019,afterinstallingthreetimesasmuchcapacitythantheothers.In2020,boththeUSandBrazilcarriedmostoftheContinent’sgrowthontheirshoulders,whileitsthirdGW-scalesolarmarket,Mexico,continueditstripdownhill,sufferingfromfossil-fuelfocusedgovernmentpolicies.NewlyinstalledsolarcapacityintheAmericasincreasedby29%to26.1GWoverthe20.3GWdeployedtheyearbefore.AstheAmericas’growthratebeattheglobalaverage,theregion’sglobalmarketshareimprovedby2%pointsto19%.OntheothersideoftheAtlantic,Europealsoincreaseditstotalinstalledcapacities,butthenegligiblevolumegrowthof0.3GWor1percentagepointto23.7GWtranslatesintoalowerglobalshareof17%,downfrom20%in2019.ThisoutcomeisactuallymuchbetterthananticipatedintheMediumScenarioofthepreviousGMO,whenweassumedthatalargenumberofpandemic-strickenEuropeancountrieswouldpulldowninstallationnumbersdramaticallyby29%to16.1GW.Butsurprisingly,around70%,thevastmajorityoftheEuropeanmarkets,addedmoresolar17FIGURE9ANNUALSOLARPVINSTALLEDCAPACITYSHARES2012-20200102030405060708090100%201220132014201520162017201820192020EuropeAMERAPACChinaMEA1%1%3%2%2%2%3%6%3%10%29%26%29%44%52%43%26%35%18%28%34%35%23%23%26%32%27%12%14%19%17%22%14%17%17%19%58%28%18%17%8%9%11%20%17%©SOLARPOWEREUROPE2021GlobalMarketOutlookForSolarPower2021-2025thantheyearbefore.NexttoEurope’smarketleaderGermany,otherGW-marketsliketheNetherlands,PolandandFrancealsoperformedbetterthantheyearbefore.ThedevelopmentsarenotableinparticularfortheNetherlandsandPoland,whichgrewtheirsolardemandto3.1GWand2.4GW,missingthetop10rankingsonlybyasmallmargin.Dutchsolarinvestorscontinuedtoprofitfromasolidnet-meteringschemeforresidentialrooftopsystemsandaregulartenderingprogrammeaddressingcommercialandground-mountedPVplantsamongotherrenewables.ThePolishsuccess,incontrast,isbasedonself-consumptionsystemsincentivisedbyafavourablepolicynet-metering/feed-inframeworkforprosumers,aRESauctionsystem,andseveralfurthersupporttools,includingreducedVATandincometaxes,andlow-interestloans.TheonlynegativeexceptionsamongEurope’sGWmarketswereSpainandUkraine,thoughmostlyforreasonsotherthanthepandemic,asdescribedearlierinthetop10section.TheMiddleEastandAfrican(MEA)regionabsorbed3.5GWofnewsolarpowercapacityin2020,abouthalfofthe6.8GWinstallationsin2019,andfallingbackclosetothelevelofthe2018marketvolumeof3.1GW.Thoughcoveringover60countries,theanalysisofMEA’snegativemarketperformanceisrathersimple,anditsoutcomehaslittletodowithCOVID-19.BothEgyptandtheUAEturnedintoGW-scalemarketsin2019,wheneachfinishedamajorsolarpowerplantproject:inEgypt,theBenbanSolarComplexwithalmost1.5GWwasfullycommissioned;inAbuDhabi,the1.17GWSweihanprojectenteredcommercialoperations.Whileseveralverylarge-scaleprojectsarebeingdevelopedintheUAEandothercountriesontheArabianPeninsula,nothingmajorwasgrid-connectedin2020.TheMiddleEast’slargestsolarmarketwasIsraeldespitea20%dropinnewlyinstalledcapacitiesto505MWin2020.TheAfricanContinentwasdominatedbySouthAfrica,whichexceededtheGW-leveldeploymentforthefirsttimebyinstalling1.3GWintheutilityanddistributedsegments,a154%improvementoverthepreviousyear.SouthAfricahasseenthestartofasolarrenaissanceunderitscurrentpresident.AftersolarprojectPPAsfromthe4throundtenderin2015werefinallysignedin2018,anIntegratedResourcePlanwitha6GWby2030solartargetwaspassedin2019,anda5throundtenderlaunchedin2021.1Globalsolarmarket-Update2000-2020/continuedGlobalMarketOutlookForSolarPower2021-202518RevolutionaryencapsulantandbacksheetsolutionslocallyavailableacrossEuropeandAsiaDiscovermoreonBorealisEmpoweringSolar.comQuentys™–thechoiceofchampionsPolyolefinencapsulantfilmsCost-effectivemoduleproductionReducedmoduledegradationAchievemorepoweroutputPolypropylenebacksheetsolutionsUpto40%costreductionWeather-proofExtradurableTotalSolarInstallationsuntil2020Theworld’stotalinstalledsolarPVpowercapacityincreasedby22%to773.2GWbytheendof2020,upfrom635GWin2019(seeFig.10).Cumulativesolarpowerhasgrownalmost500timessincethestartofthemillennium,whenthegrid-connectedsolarerabasicallybeganwiththelaunchofGermany’sfeed-intarifflaw.Comparingthedecadejustgonebywiththeonebeforethat,theglobaldeployedon-gridPVcapacityhasgrownanastonishing1,860%–from41.5GWin2010.GlobalMarketOutlookForSolarPower2021-202519FIGURE10TOTALSOLARPVINSTALLEDCAPACITY2000-20200100200300400500600700800900GWEuropeAMERAPACChinaMEA20002001200220032004200520062007200820092010201120122013201420152016201720182019202022%25%23%773.2©SOLARPOWEREUROPE2021Over770GWsolarcapacityinstalledtodayStronggrowthinAsia’stopmarketsChinaandVietnammadeupforbigdisappointments,likeIndia,furtherstrengtheningthestandingofsolarintheAsia-Pacificregion.Theregioneasilymaintaineditsleadershipin2020,representing59%oftheglobalsolarpowergenerationcapacities,whichishalfapercentagepointhigherthantheyearbefore(seeFig.11).Newlyinstalledcapacitiesof84.9GWin2020ledtoatotalof453.2GW.ThestagnationoftheEuropeansolarpioneersresultedinadecreaseofabout1percentagepointinmarketshare,downto22.4%,thelowestvalueinthelastdecade.Buttheadditionof23.7GWwasenoughtodefenditssecondpositionbasedonacumulativePVcapacityof173.9GW.Likeinpreviousyears,theAmericaswererankedthethirdlargestsolarregionintheworldin2020;totalinstalledPVcapacitiesof125.6GWtranslatedina16.2%stake,ahalfpercentagepointhigherthanin2019.ThedecreaseindemandintheMiddleEastandAfricahadnoimpactontheregion’ssolarpositioninglastyear.Withacumulativesolarcapacityof20.5GW,itsworldmarketshareremainedexactlyat2.7%in2020.1Globalsolarmarket-Update2000-2020/continuedGlobalMarketOutlookForSolarPower2021-202520FIGURE11TOTALSOLARPVINSTALLEDCAPACITYSHARES2012-20200102030405060708090100%201220132014201520162017201820192020EuropeAMERAPACChinaMEA1%1%1%1%2%2%2%3%3%7%12%16%19%25%32%34%32%33%14%18%22%25%24%24%24%26%26%9%10%12%13%15%15%15%16%16%70%58%49%42%34%28%24%24%22%©SOLARPOWEREUROPE2021AcomparisonofindividualcountriesshowsthatChina’s60%marketgrowthin2020hadlittlepositiveeffectonitsoutstandingsolardominance.Itsoperationalsolarpowercapacityincreasedto32.8%,a0.5%highersharethanin2019–andagain,that’sclosetoone-thirdofglobalpowergenerationcapacities(seeFig.12).Thevolumeofgloballydeployedsolarsystemsissimplytoolargetobeimpactedbyonecountryduringthecourseofoneyear,evenifitisasdominantasChina.Forthatreason,theorderofthedirectfollowershasnotbeenaltered–ChinawasagaintrailedbytheUnitedStates,JapanandGermany.WhiletheUSkeptits12%marketshare,theothertwolostanotherpercentagepointeachin2020,liketheyearbefore,makingtheUSnowtheonlyothercountrywithadouble-digitshareinglobalsolarpowergenerationcapacities.TheUS’cumulativeinstalledPVcapacityreached95.5GW,Japan’s71.2GWresultedina9%share,andGermany’s54.6GWa7%share.Againunderperforming,India’sdistancetoGermanywasevenlargerattheendof2020thantheyearbefore.Still,its45.9GWoftotalinstalledsolarcapacitywasgoodenoughtoholditsfifthplacewitha6%marketshare.Thetop5havebeeninaleagueoftheirownforquiteawhile,anditdoesn’tlooklikethisischanginganytimesoon.ThecountryrankedsixthhaslessthanhalfofIndia’ssolarpowercapacity.Thebottomhalfofthetop10sawonlyafewnotablechanges:Italy,at21.2GW,isnowverycloselyfollowedbyAustraliaat21.1GW;Vietnamclaimingrank7asitenteredthegroupwith18.1GW,replacingtheUK,whichdroppedoutcompletely.WhileSouthKoreareached15GWofoperatingsolarpowerplants,Spain’s14.2GWhelpedthecountryholdonto10th.GlobalMarketOutlookForSolarPower2021-202521FIGURE12TOP10SOLARPVMARKETSTOTALINSTALLEDSHARES2020RestofWorld;21%Italy;3%Spain;2%India;6%SouthKorea;2%Germany;7%Japan;9%Vietnam;2%Australia;3%UnitedStates;12%China;33%773.2GW2020©SOLARPOWEREUROPE2021However,examiningcloselytheinstalledPVcapacityfromaper-capitaperspective,theglobalsolarpicturelookscompletelydifferent.Despiteitsstrongdominance,noneoftheglobaltop3markets–China,USAandIndia–figuresontheW/capitatop10list(seeFig.13).Whilethreeofthefourcountrieswiththehighestinstalledsystemcapacitiesperinhabitant–Australia,GermanyandJapan–alsobelongtothe10world’sbiggestsolarmarkets,severalothersdonot,includingthenewNo.3,theNetherlands,which,ifallgoesasforecasted,willendtheyeareveninthesecondplace.TheoldandnewpercapitasolarleaderwillagainbeAustralia,withanimpressiveinstallationlevelofover1kWperinhabitant.1Globalsolarmarket-Update2000-2020/continuedGlobalMarketOutlookForSolarPower2021-202522FIGURE13TOP10COUNTRIESSOLARCAPACITYPERCAPITA2020AustraliaItalySwitzerlandBelgiumJapanGreeceSpainIsraelGermanyNetherlands1st7th6th5th4th8th9th10th2nd3rd826Watt/capita350Watt/capita354Watt/capita540Watt/capita563Watt/capita315Watt/capita303Watt/capita301Watt/capita652Watt/capita603Watt/capita©SOLARPOWEREUROPE2021PROSPECTS2021-2025Forecast2021Thefirsthalfof2021inthesolarsectorwascharacterisedbyincreasingcostsforwafer,cellandmodulemanufacturers.Siliconpricesmorethandoubledinthefirst5months,whilealuminiumappreciatedbynearlyone-third,encapsulationmaterialcostsgrewinthelowdoubledigits.Silver,themostexpensiveconsumableofasolarcellbesidesthewafer,costsoveroneandahalftimesitsaverageoverthelastfewyears.Onthesystemside,risingsteelandcopperprices–usedinmountingsystemsorcables–drovethecostshigher.However,themaincostdriverhasbeensilicon,whereaseveresupplyshortagehascausedsolar’smainrawmaterialtoroughlydoubleitscostinamodule,addingabout20%inproductioncosts.Theconsequence:modulepriceschangedtheirgeneraldirectionforoveradecade–theynotonlystoppeditsdownwardstrendbutwentupsignificantly.Despitethevariouspriceincreasesandfurthernegativeimpactsfromthepandemic,solarwillseeanotherstellargrowthyearin2021.InourMediumScenario,weanticipatenewlyinstalledcapacitiestoreach163.2GW,an18%growthrateoverthe138.2GWinstalledin2020(seeFig.13).Thisestimateisabitmoreontheconservativesidecomparedtoleadingsolaranalysts.InJune,IHSMarkitreviseditsforecastdownto171GW,from182GW,afterBloombergNEFhadmarginallylowereditsforecastto182GW,from184GWendofMay.Thesituationwiththesiliconshortageisnotexpectedtogetmuchbetterthisyear,butit’sunlikelymodulepriceswillascendanyfurther;otherwisetoomanyprojectswouldbedelayed.Whiletendersusuallyhavestrictdeadlinesforcingdeveloperstofinishintime,thegrowingfieldofcorporatePPAsisgenerallynotverytime-sensitive;ifasolarpowerplantprojectdoesn’tmakeeconomicsense,itwon’tbebuilt.AlreadyinJune,modulefactory-gatepricesremainedbasicallystable,thoughatrecordlevels.Howquicklythingschangeinthesolarsectorcanbeseenwithanothermodulecomponentshortage,solarglass–thiscasewasresolvedveryrapidlyinrecentmonths.Afterthepricesforsolarglassspikedlastyearwithrisinginterestinbifacialsolarmodules–aproductcommonlydesignedwithtwoglasscovers–,Chineseglassmanufacturersreactedquicklytobuildnewcapacities.Glasspricesarebacktonormalnow,whichhasofferedsiliconpricesfurtherroomtorise.1Globalsolarmarket-Prospects2021-2025/continuedGlobalMarketOutlookForSolarPower2021-202524©SOLARPOWEREUROPE2021FIGURE14WORLDANNUALSOLARPVMARKETSCENARIOS2021-2025050100150200250300350400GW2022202320242025201620172018201920202021138.218%11%6%11%25%HistoricaldataLowScenarioHighScenarioMediumScenario197.9123.5174.7346.7TheothermajorthreattogrowthintheglobalsolarsectorhasbeentheCOVID-19virus,butitseemstobecurrentlyundercontrolinmostofthelargesolarmarketsastheymakerapidprogressinvaccinatingtheirpopulation.Regardless,the2020experienceduringtheheightofthepandemicshowedthatsolarhasproventobeveryresilient.Eveninmostcountriesheavilyaffected,solardemandhasgenerallyremainedverystrong–andthathasn’tchanged.Likelastyear,theGlobalSolarCouncilconductedasurveyontheimpactsofCOVID-19onthesolarsector,whichshowedanimprovingindustryoutlook–with81%oftherespondentsexpectingsalestogrowin2021comparedto72%in2020(seeHighlightatpg.75).Ourmarketsensitiveanalysisfor2021showsalargespread.TheLowScenarioestimatesademanddropto123.5GW,whichisextremelyunlikelywhenlookingatthepositivemarketdynamicsinthefirsthalfoftheyear.However,ifanewglobalwaveofthepandemictakeshold,maybeevenwithanaggressivemutation,theUSbanonsolarproductsfromChina'sXinjiangregionmeticulouslyexecutedandothercountriesfollowing,thismighthaveseverenegativeimplicationsonmarketgrowthin2021.There’salsothepossibilitythatmoreprojectswillbeshelvedthananticipateddependingonfurtherpricedevelopments.Butit’smuchmorelikelythatthependulumswingssomewhatintheotherdirection.OurHighScenarioforecastsupto197.9GWofsolaradditionsin2021,whichalsosoundsextremelyoptimisticandquiteimprobable.Modelledbottom-up,ifthisscenariomaterialised,itwouldmeanthatbasicallyallpossiblesiliconoutputwillbeconsumed.Asinpreviousyears,thebiggestwildcardremainsChina,whichstillhasalevertomovethesolarbalancesignificantlyineitherdirectionevenatamarketoftoday’ssize.Regionalmarketdevelopments2021AslongasChina’ssolarmarketdominanceisasoverwhelmingasithasbeeninrecentyears,it’sratherdifficulttoestimatemarketgrowthaccurately–thatwasthecaseinthepast,whenuncappedfeed-intariffsfacilitatedunexpectedgrowthrecordsupto53GWin2017,andhasbeengettingonlymorecomplicatedasthecountryistransitioningawayfromtraditionalincentiveschemestoauctionsandnon-subsidisedsystems.Afterthereformwasstarted,demanddroppedto44GWin2018,evenfurtherto30GWin2019andbouncedbacktoanearrecordlevelof48GWin2020.Nowonderthelatestmidscenariosofdifferentanalystsrangewidely–from57GW(IHS)to60GW(ChinaPVIndustryAssociation)and65GW(BNEF).OurMediumScenarioforChinaleansmoretotheconservativeside,at55.9GW.WhiletheprojectpipelineinChinaisover50GW,thegrid-connectiondeadlineforthebulkofthesehasbeenextendedinto2022,evenifconditionsworsensomewhat.ThefinalsizeoftheChinesemarketin2021willdependonmodulepricesandavailabilityinthecomingmonths,whichwillbethedecisivecriteriaiftheruninthefourthquarterissimilarto2020,when61%oftheentireyear’ssolarcapacitywasinstalled.InQ1/2021,Chinaadded5.3GW.Takingayear-endsprintintoaccount,ourHighScenarioforChinaanticipatesupto71GWin2021.AsChinaissupposedtogrowonly16%YoYthisyear,itsglobalmarketsharewilldecreaseslightlyby0.6percentagepointsto34.3%.TheotherAsia-Pacificcountriescombinedwillalsolosesomeshare,4.4%downto22%.Althoughsomeoftheirmajormarketsareexpectedtoaddsignificantlymorecapacitiesthanin2020,theiraveragegrowthwillbebelowmarketrates.Theregion’sbiggestsolar‘loser’willbeVietnam,eventhoughthistitlemightbeabitunfairasnobodyhadexpectedthisshootingstarwouldflysohigh.Afterthesolarheydaysin2020cametoanendwiththedeadlineoftheFiT2programmeendoflastyear,there’snomorefundingschemeinplaceatthetimeofwriting;everyinvestmenthastorelyonself-consumption.Theindustry’shopesnowrestonrapiddevelopmentofthepilotprogrammeforPPAsandimplementationoftheFiT3draft.Still,ourMediumScenarioforecasts2GWnewlyinstalledcapacitiesin2021,acknowledgingaveryexperiencedlocalsolarindustrywithalargegroupofsolarinstallersandabusinesscaseforself-consumptionsystemsifsolarLCOEsareattractive.Thiswouldbethecountry’sthirdbestsolaryeareverbyfar.WithIndia’s100GWSolarMissionProgrammescheduledtoclosebyendof2022,butthetargetstillmorethanhalfthewayahead,India’sgovernmentistryingtobeassupportiveaspossibleduringatimethecountryhasbeenhitmassivelybyanotherCOVID-19waveinthefirsthalfof2021.Despitethechallengesfromthevirus,aggravatedbytheunsolvedissueofretroactivere-negotiationclaimsforPPAs,ourMediumScenarioisveryoptimisticonIndia’ssolardevelopmentin2021.Afternearly2.5GWwasinstalledinQ1/2021andalarge-scaleproject-pipelineofover50GW,weanticipatedsolaradditionsofGlobalMarketOutlookForSolarPower2021-20252510.0GW.WithIndiabeingtraditionallyverysensitiveonanyPVproductprice,thereisagoodchanceofseveralprojectsgettingdelayed.TheLowScenarioassumesnewlyinstalledcapacitiesof5.6GW.TheotherAsia-PacificGWmarketsareexpectedtoseequitedifferentevolutiontrends–minus15%to6.9GWforJapan,37%to6.9GWforAustralia,1%to4.2GWinSouthKorea,and55%to2.6GWinTaiwan.However,likeinthepastyears,despiteabout5%sharelosses,ourMediumScenarioforecastclearlyshowsthatallAsia-Pacificcountriestogetherwillcontinuetodominateglobaldemandwithacombinedshareof56.4%in2021(seeFig.15).OnthelightweaknessofAsia-Pacific,allotherregionsareassumedtogrowtheirmarketsharesbyabout1to2%.In2021,theAmericaswillremaintheworld’ssecondlargestregionforsolarinstallationswithamarketshareof20.5%.Thereisonemajorreasonforthisjump–theperformanceoftheUS.The2-yearextensionoftheITCandthepositivedevelopmentsintherooftopsegmentsupportedbythepro-renewablesclimateofthenewadministrationwillboostsolardeploymentsto24.1GW,a25%growthover2020,whichisinlinewiththe23.8GWforecastoftheUSSolarEnergyIndustriesAssociation(SEIA)andWoodMackenziepublishedintheirJuneQ2marketupdate.Inaddition,theothermajorAmericanmarket,Brazil,isbelievedtocontinueitssolarstreak,thoughatalowerlevel.Backedbyanestablishedandfairlyregularpowertenderscheme,averyattractivenetmeteringprogrammeupto5MW,andastrongsystem,Brazilisexpectedtoboostnewlyinstalledsolarcapacitiesby16%to3.6GW.EventhethirdAmericanGW-levelsolarmarket,Mexico,whichisfacingadifficultpoliticalenvironmentforrenewabledeployment,willseeinstallationsgrowby24%to2.3GWin2021.Followingaflatmarketin2020,whenEurope’sglobalmarketsharedecreasedby2.7%pointsto17.2%,in2021thecontinent’sshareofthepiewillgrowagainto19.5%.Withhighvaccinationlevelsreachedinmostcountries,thehealtheffectsofthevirusseemtobeundercontrolinthesummerof2021,exceptforRussia.ThemaindriverforsolargrowthinEuropeistheEU,whichhasambitiousClimatetargetsandhasbeenworkingonvarioussophisticatedlegislativetoolsetstowardcarbonneutralityby2050withintermediategoalsforitsmemberstatesin2030.WhenlookingjustattheEuropeanUnion,23ofits27members,includingallthelargestmarkets,areexpectedtoinstallmoresolarthantheyearbefore.WearemostupbeatontheEU’slargestmarketin2020,Germany,whichhasalreadydeployed2.45GWbyMay2021,andissupposedtoadd6.2GWbyyear-end.Recentchangesinlegislationhaveresultedinseveralpositive,andafewnegative,changesforthesolarsectorinGermany.Whiletaxesonself-consumptionhavebeenextendedfrom1Globalsolarmarket-Prospects2021-2025/continued26FIGURE15EVOLUTIONOFGLOBALANNUALSOLARPVMARKETSHARESUNTIL2025050100150200250300GW202020212022202320242025EuropeAMERAPACChinaMEA3%4%4%5%5%6%35%34%37%38%38%38%27%22%23%22%23%22%19%21%17%17%15%14%17%20%18%18%19%19%©SOLARPOWEREUROPE2021residentialtosmallcommercialsystemsamongotherimprovements,anewtenderingschemeimposedonindustrialrooftopsystemsassmallas300kWthatcouldpreviouslybenefitfullyfromtheself-consumption/feed-intariffschememakesinvestmentsinthissegmentmuchlessattractive.NexttoGermany,theEuropeanContinentwilllikelycount7otherGW-markets,morethananyotherglobalregion.That’sonemorethanin2020andalloftheseGW-marketsareexpectedtodeploymoresolarpowerin2021thantheyearbefore.EstablishedEuropeansolarmarketleaders,Spain,theNetherlandsandPoland,willlikelyeachaddover3GW,whileFranceisanticipatedtotouchthe2GWlevel,DenmarkandGreeceexceedingtheGWlevelforthefirsttime,andTurkeyreturningtothatgroup.UkrainewilldropoutoftheGWleagueasaconsequenceofworsenedsupportframeworkconditions;therecentretroactiveFiTcutshaveseverelydamagedtheinternationalinvestmentconfidenceinthisEasternEuropeanmarket.Duetoarevisionofitsregionalsupportschemes,BelgiumshouldalsoseeadecreaseinannualinstallationsaftersurpassingtheGWmarkforthefirsttimesince2011.Incontrast,thepositivedevelopmentsinDenmarkarenoteworthyinparticular.AnorthernEuropeancountrywithmodestsunshinelevels,mostlyknownforitsleadershipinwindpower,isnowseeingsolarwinsharesintechnology-neutraltendersinrecenttimes:themaindriverofitssolarboomarecorporatePPAbasedsystems,triggeredbysolar’sattractivevaluepropositionintermsofcostandversatility.SolarintheMiddleEastandAfricaregionisgainingstrengthin2021.Additionsof5.8GWmeana64%growthrate,andalmostgetclosetotherecordlevelsdeployedin2019.OurMediumScenarioforeseestheregiontogrowby1percentagepoint,reachingaglobalmarketshareof3.6%onthebackofUAEturningintoaGWmarketagainandSouthAfricaanticipatedtoinstallclosetothatlevel.Atthesametime,thepositivenewsontheadvantagesofsolarisquicklyspreadingacrosstheregion,withmanyutilitysystemsbeingplannedinvariouscountries.GlobalMarketOutlookForSolarPower2021-202527GlobalSolarMarketDevelopments2022to2025Thenextfouryearswillbeaverygoodperiodforsolarpoweraroundtheworld.Foreachoftheseyears,wehaveconsiderablyincreasedourforecasts,butnextyear,2022,willstandoutonvariousfronts.InourMediumScenario,weseetheglobalsolarmarketadding203GWin2022,thefirsttimeeverthatannualPVinstallationswillcrackthe200GWlevel.Toputthatintoperspective,thiswouldbeonlyfiveyearsafterthe100GWlevelwasreached,andtwoyearsearlierthanourGMO2020forecasted(where199.8GWwaspredictedfor2024).Thiswouldalsomeana25%growthrateoverthe163GWaddedin2021,higherthanforanyotheryearinthis5-yearmarketoutlook.Thefinaldeploymentvolumeswilldependonpricedevelopmentsin2022andH2/2021.Ifsilicon,andinconsequence,PVmodulepricesdonotdecreaseinQ3/2021,whichislikely,therewillnotbeafourthquarterrushbutmoredelaysofprojectstobefinalisedin2022.Muchofthe2022growthwillbeshoulderedbytwocountries:ChinaandIndia.Chinawillexecuteonitsfourteenth5-yearplan,whichstronglybackssolarandwind,demonstratingthatthecountrywantstoexpandextensivelyandacceleratethedevelopmentofthesetechnologies.WeareverybullishonsolarinChinanextyear.Takingintoaccountthevolumespostponedfrom2021,webelievetheChinesemarketwillskyrockettonearly76GWin2022,whichisclosetoCPIA’shighforecastforthatyear.India,ontheotherhand,willenteritsfinalyearoftheNationalSolarMission,doingitsutmosttoadvancesolarprojectgrid-connectionstowardsthe100GWtarget,eventhoughnoneofourscenariosseethisinstallationtargetbeingmet.Still,thesub-continentisanticipatedtoaddnearly18GWin2022,althoughitcouldreachupto22GW,accordingtoourHighScenario,dependingonmodulepricesforIndia’sdevelopers,COVID-19,andthePPAgrid-connectionissues.StrongdemandwillcontinueintheEuropeanUnion,whererecoveryfundswillbewidelyusedtosupportsolarastheregionbeginstolookhowtoreachitsnew,higherrenewable2030targets.Europewilladd37.4GWofnewPVcapacity.TheAmericas’growthwillflattenasitsmajorsolarmarket,theUnitedStates,isduetotakeabreathafterastrong2-yeargrowthphase;withthecountryincreasingjustslightlyto25.5GW,thecontinent’ssolargrid-connectionsfor2022addupto34.7GW.InMEA,positivedevelopmentscontinueonabroadeningscale,finallybeatingthe2019installationrecordwithadditionsof7.8GW.BasedonChinaandIndia’sstrength,theAsia-Pacificregionasawholewillgrowitssharesto60.6%in2022,whileEuropeisanticipatedtolosesomeofits2021gainsto18.4%,theAmericaswilldropbelow2020levelsto17.1%,andMEAwillmarginallyincreaseitsshareto3.9%.Theyears2023–2025willbecharacterisedbysomewhatmoremodestgrowth.OurMediumScenarioanticipates11%marketgrowthto225GWin2023,6%to239GWin2024,andareturntothe2-digitlevelat11%to266GWin2025.AfterChina’sverystronguptickin2020,themomentumisanticipatedtoleveloutintheworld’slargestmarket,butitwillcontinuetoaddimpressivevolumesandperformatleastlevelwithglobalaveragegrowthwith11%tonearly85GWin2023,and8%to91GWin2024.In2025,Chinaisexpectedtogrowdemandby12%to102GW,markingthefirsttimeasinglecountryadds100GWinoneyear.OurMediumScenarioassumptionsarebasicallyinlinewithCPIA’smidforecastforthosethreeyears.Asia’ssecondlargestmarketIndiaisexpectedtoreachits100GWon-gridsolarcapacitytargetduring2024,afteraddingover19GWinboth2023and2024.USdemandwillpeakat28GWin2023withtheexpirationofthe26%solarinvestmenttaxcredit,andwillreturntolevelsalittlehigherthantheyearbefore,between25.5GWand26GW,whereasmostofEurope’scountriesstrivingtoinchtowardstheEU’s2030renewablestargetwillbasicallyexpandinlinewiththemarket,resultinginthecontinent’ssolaradditionstoriseto45GWin2024,and51GWin2025.MEAoutperformsaverageglobalgrowth–withlittlevisibilityintomanycountriesofthatlargebutlessdevelopedon-gridsolarregion,weanticipateannualinstallationstoreach16GWin2025,equaltoanewrecordshareofover6%.Butthatcouldalsobemuchmore,asourhighscenarioforecasts26GWadditionsforMEAin2025.LikeMEA,Europewillalsofurtherimproveitsglobalstandingto19%between2023and2025,whileAsia-PacificincludingChinawillkeepitsglobalsharesatasimilarlevelofabout60%.Theonlyregionthatwilllosemorethan2%pointsistheAmericas,asgrowthisstillmostlycarriedbytheUS,whichisnotenoughtokeepupwiththesolardevelopmentsintheotherregions.1Globalsolarmarket-Prospects2021-2025GlobalMarketOutlookForSolarPower2021-202528GlobalMarketOutlookForSolarPower2021-202529GW,with1,604GWfortheMediumScenarioin2024–thisisabout11%higher.Thisyear’sGMOanticipatesforourmost-likelyMediumScenariothattheglobalsolarpowerfleetwillreach1,870GWinthefinalyear,2025,ofthisanalysis.Underoptimalconditions,theworldcouldoperatePVgenerationplantcapacitiesaslargeas2.147GWbytheendof2025,thefirsttimewearelookingintothe2TWlevelforanyofourscenarios.However,themostlikelyscenarioforenteringthesolarterawattageremains2022,butnowwearealsocertainthatthislevelwillbereachedeveninourLowScenario.InourMediumScenario,wenowexpectthattotalglobalinstalledPVgenerationcapacitywillpassthefollowingmilestonesoverthenext5years:900GWin2021,1.1TWin2022,1.3TWin2023,1.6TWin2024,and1.8TWin2025.Regardingcumulativegrid-connectedsolarpowercapacitiesaroundtheworld,ourGlobalMarketOutlook2021ismuchmoreupbeatthanlastyear,whichwepreparedinthemidstofthefirstwaveofCOVID-19(seeFig.16).Althoughthepandemiccontinuestoimpactmanypeoplearoundtheworld,inmid-2021increasingvaccinationlevelsinmajorsolarmarkets2021,theexperienceofthesolarsector’sresiliencein2020,andrecoveryfundsaccessibleforsolarinseveralcountrieshavemadeusmoreoptimisticforthenextfewyears.TheMediumScenarioforecaststotalinstalledcapacitieswillreach936GW,whichisabout5%higherthaninlastyear’sGMO.Thefinalyearofthe5-yearforecastinthepreviousGMOrangedbetween1,180and1,680GW,withthemostlikelyMediumScenarioresultingin1,448GWoftotaloperatingsolarpowerin2024.ForthisGMO2021,weforecastbetween1,380and1,801©SOLARPOWEREUROPE2021FIGURE16GLOBALTOTALSOLARPVMARKETSCENARIOS2021-202505001,0001,5002,0002,500GW202220232024202520162017201820192020202122%21%20%18%17%9711,5532,147773.2HistoricaldataLowScenarioHighScenarioMediumScenario8971Globalsolarmarket-Prospects2021-2025/continuedGlobalMarketOutlookForSolarPower2021-202530FIGURE17TOP20MARKETSSOLARPVADDITIONS2021-2025UnitedKingdomUAEItalyMexicoTurkeyDenmarkPolandTaiwanFranceBrazilVietnamNetherlandsSouthKoreaSpainAustraliaJapanGermanyIndiaUSChinaGW0100200300400500600HighscenarioMediumscenarioLowscenario494160106524743282724402319151611131011984091298844383424222119181714111099877318975834282515161681311107575355©SOLARPOWEREUROPE2021The20marketswiththehighest5-yearinstallationpotentials(intheorderofMediumScenarioassumptions;seeFig.17)showanumberofchangescomparedtothe2020GMOedition.Thetopthreemarketsremainthesame–China,US,andIndia,andinthesameorder.Theanticipatedinstallationvolumesforbothhighandlowscenariosoverthenextfiveyearsareagainhigherformostmarkets,withafewexceptions,suchasIndia.Newcomersonthisyear’sTop20listarethreeEuropeanmarkets:theUnitedKingdom,Denmark,andPoland.Thepatternofthemarketsonthislistremainssimilarwithafewcountriesinstallingthebulkofallsolarsystemcapacity,thoughthenumberofmid-sizemarketsisgrowing.Thistimeagain,weexpectintheMediumScenariofortwocountriestoinstallover100GW:China(409GW)andtheUnitedStates(129GW).Butweseethenumberofcountriesaddingatleast20GWincreasefromsixtonine,includingChina,UnitedStates,India,Germany,Japan,Australia,Spain,SouthKorea,andtheNetherlands.Thistime,highercapacityvolumesareneededtoentertheTop20marketprospects,withatleast6.8GWcomparedto5.9GWlastyear.Aroundthreequartersofthetop20marketsareexpectedtoinstallatleast10GWeachbetween2021and2025,accordingtoourMediumScenario,withnewcapacityadditionsinthisgroupshowingalargespread,rangingfrom409GWforthefirst,China,to6.8GWforUnitedKingdom,thelastonthislist.All20marketscombinedareestimatedtoaddatotalof938GWuntil2025.ThisismuchmoreoptimisticthaninourpreviousGMO,whenwehadprojectedthisgrouptoinstall693GWoverthecomingfiveyearsinourMediumScenario.Thesensitiveanalysisforthetop20showsadditionsof1.156GWoverthenextfiveyearsuntil2025intheHighScenario,and686GWintheLowScenario;thisisrespectively280GWand213GWmorethanourGMO20205-yearassumptions,duetotheconsequencesofCOVID-19.Puttingthemicroscopeonlyonthetop5,thesemarketscombinedareexpectedtogrid-connect859GWuntil2025intheHighScenarioand535GWintheLowScenario,coveringashareofaround74%and77%oftotaladditionsinthatperiod(intheGMO2020,itwas60%and68%).Overthe5-yearperiodofthisGMOweonceagainseeverypositiveprospectsforpoliticalsupportbehindsolar,withclimatechangebecominganincreasinglyimportanttopicforpolicymakersaroundtheworld,andawarenessquicklyspreadingthatsolaristhemostcost-effectiveandjob-intensiveenergytechnologywiththehighestvariability(seeFig.18onthefollowingpage).Ourweatherforecastissunnyforthreequartersofthetop20countries,withallbutoneofthemexpectedtoshowtwo-digitannualgrowthrates.Thecountrywiththelargest5-yeargrowthrateexpectationsinthisgroupisDenmark,withanimpressivelevelof47%CAGR,wherethelowcostofsolarhasenabledthetechnologytotakeawaysharesfromwindintechnology-neutralstatetendersandattractseveralinvestorsinlarge-scalesubsidy-freePPAsystems.OntheothersideofgrowthexpectationsforthisgroupisJapan,withacompoundannualgrowthrateof9%.AsJapanoperatesthethirdlargestsolarpowerfleetintheworld,withover71GW,andisthecountrywiththeworld’sfourthlargestsolarcapacityinstalledpercapita,this9%growthtranslatesintoadditionsofnearly39GWintheMediumScenario.Ofcourse,muchmoresupportfromJapan’sgovernmentisneeded,astherestructuringoftheenergymarkethastakentoolongandsolarinstallationsarestilltooexpensiveincomparisontootherdevelopedPVmarkets.Butforecastsofmarketdeclineforthepasttwoyearsprovedwrong,acceptanceforthetenderschemeisslowlygrowing,andnextyearthenewself-consumptionschemewillstart;allofwhichmakesusmorehopefulabouttheprospectsforJapanforthenextfiveyearsthanpreviously.Australia’sfederalgovernmentstillhasawaystogotosupportsolar,however,manypolicyinitiativesonthestatelevelwillboostsolarinthecomingyears.Further,thereareannouncementsforgiganticgreenhydrogenprojectsinAustralia,whichifsupportedbylocalpolicymakers,couldliftsolarinthecountrytoanentirelynewlevel.Theweatherforecastiscloudyforfourcountries,ofwhichtwoareexpectedtoseeonlyone-digitgrowthrates.OneistheUnitedKingdom,whichisanticipatedtogrowwith8%CAGR.Thecountryismissingmajorsupportschemesforsolar,buttheregulatoryframeworkenablesgrowthbasedoncostcompetitiveness,increasinglyplayingintosolar’shandseveninitscloudynorthernclimate.Theothercountrywithone-digitgrowthprospectsisItaly,where2020wasanotheryearthatthemarkethoveredatconsistentlylowinstallationlevels.AcomplicatedpermittingenvironmentandanunfavourabletendersystemforsolarhavekeptItaly’sPVmarketfromtakingoff,eventhoughtherearepositivesignalsintheresidentialrooftopmarketstemmingfromaCOVID-19recoverypackage.AlthoughnotyetbackintheGW-GlobalMarketOutlookForSolarPower2021-202531clubin2020,Turkey,despiteitsdisastrousfinancialsituation,isanticipatedtore-joinin2021,mainlybackedbyarecently-introducednetmeteringschemeforsmall-scaleinstallationsandtenders.Whilelastyearwassunny,VietnamisfacingheavycloudsastheincrediblysuccessfulFiT2programmehascometoanendwithoutasuccessorinplace.ItnowremainstobeseenwhenandhowtheFiT3programmewillcomeintoeffectandwhenthePPAschemewillbefullyimplemented.1Globalsolarmarket-Prospects2021-2025/continuedGlobalMarketOutlookForSolarPower2021-202532Country2020Totalcapacity(MW)By2025TotalcapacityMediumScenario(MW)2021-2025Newcapacity(MW)2021-2025Compoundannualgrowthrate(%)PoliticalsupportprospectsChina253,404662,818409,41421%UnitedStates95,519224,991129,47219%India45,918133,93588,01724%Germany54,60998,31343,70412%Japan71,182109,66338,4819%Australia21,05355,48234,42921%Spain14,15337,65423,50122%SouthKorea14,97736,64721,67020%Netherlands10,32431,02820,70425%Vietnam18,07036,77418,70415%Brazil7,61326,02918,41628%France10,96727,63116,66420%Taiwan5,81819,53513,71727%Poland3,90115,11911,21831%Denmark1,64411,4029,75847%Turkey6,76715,5118,74418%Mexico6,80815,5318,72318%Italy21,19129,5688,3777%UnitedArabEmirates2,4049,8617,45733%UnitedKingdom13,78020,5476,7678%FIGURE18TOPSOLARPVMARKETS’PROSPECTSInsummary,anincreasinglysupportivepolicyenvironmentwithfurthercostreductionandtechnologyinnovationspromisesaverybrightinvestmentclimateforsolaroverthecomingyears.TheonlyrainycountryinourpoliticalweatherforecastisMexico,whereannualinstallationsaresettoshrinkduetolargeuncertaintiesoverthefutureofthepolicyframeworkforsolar.Thegovernment’sdecisiontosupportfossilfuelstothedetrimentofrenewablestookitstollontheoutlookforsolar,withinvestorconfidenceseverelyaffected.Still,eveninadifficultpoliticalenvironment,Mexicoisexpectedtohavea18%CAGRuntil2025,whichshowshowresilientsolartrulyis.SEGMENTS2021-2025Thegrowthinannualsolarinstallationsin2020ledtoanincreaseincapacitiesinboththerooftopandtheutility-scalesegments.However,themarketdynamicsfordistributedsolarhavebeenverydifferentthanforcentralisedsolar.At60.6GW,rooftopadditionsgrewby46%comparedtothepreviousyear,whentheytotalled41.6GW.Bycontrast,utility-scaleinstallationsgrewbyjust3%,reaching77.6GW–althoughtheystillcontributemostofthetotalannualcapacity(56%).ThiswaspartlytheimpactofCOVID-19onbusinessconditions,whichhamperedworkonlarge-scalesolarparksandcauseddelaysinprojectcompletions.GlobalMarketOutlookForSolarPower2021-202533InChina,thetransitionfromtheuncappedfeed-intariffsystemtoanewregimeofauctionsandsubsidy-freeprojectsdidnotpreventtheground-mountedsectorfromexpandingsignificantly.TheChinesemarketstilllargelyreliesonlarge-scaleprojects,whichmadeupanevenhighersharein2020thantheyearbefore—about70%oftheannualcapacity.Harddeadlinesforsubsidisedutility-scalesystemspropelledgiganticdemand.However,supportforrooftopsolarhadthissegmentgrowaswellonabsoluteterms,byover3GWyear-on-year.IntheUnitedStates,the2ndlargestsolarmarket,adeadlinefortheITCthatwassurprisinglyextendedendofDecember2020atthesame26%leveldidtriggerarunonground-mountedsolar.Atthesametime,demandforresidentialrooftopsystemsgrewless,whiletheC&Isegmentevendeclined.Insum,over15GWofutility-scaleprojectswereinstalled,increasingthatshareto81%intheUnitedStateslastyear.Whilethetwolargestsolarmarkets,ChinaandtheUnitedStates,sawanexpansionoflarge-scaleprojects,ground-mountedinstallationsexperiencedasuddenslowdowninmanyothergeographies.AchangeintheincentiveschemeinVietnam,theworld’s3rdlargestmarket,shifted,toaverylargeextent,thenewlyinstalledcapacityfromcentralisedtodistributedsolar.InIndia,gridconnectionissues,tenderre-negotiationsandthesevereimpactsofthehealthcrisisledtoadramaticcontractionofthesolarsector,asevidencedbyasignificantdecreaseinnewlarge-scaleprojects—itsfullydominantsolarsegment.InUkraine,afteranexceptionalyearforsolar,theendofgenerousfeed-intariffschemesandretroactiveFITcutsforlarge-scalesolarbroughtthemarketbackbelowtheGW-scale.Inaddition,thefullcommissioningin2019ofultra-largesolarprojectsintheMiddleEastthatwerenotfollowedupbynewinstallationsofsimilardimensionsalsoplayedaroleinthereducedgrowthofthesegment.Deployinglargevolumesofutility-scalesolarismuchsimplerthancreatingadistributedPVrooftopmarket,whichrequiresasubstantialperiodoftimeandalotofefforttoeducateconsumers,whilesettingupaneffectiveplatformwiththerightfinancinginstrumentsandtechnicalstandards.That’samajorpartofwhyemergingmarketsusuallybegintheirforayintosolar1Globalsolarmarket-Segments2021-2025/continuedGlobalMarketOutlookForSolarPower2021-202534FIGURE19SOLARPVROOFTOPANDUTILITY-SCALESEGMENTSSCENARIOS2021-2025002020404060608080100100120120140140160160180180GWGWHistoricalMediumscenario20202020202120212022202220232023202420242025202560.677.6169.496.3RooftopsolarUtility-scalesolar©SOLARPOWEREUROPE2021withtendersforutility-scalesolarandfrequentlystruggletosetupthedistributedrooftopsegment,evenifpoliticiansgenerallypreferPVonrooftopsasitavoidsanypotentialconflictsonlanduse.AgoodexampleofsuchadevelopmentisIndia,whichtargets100GWofsolarby2022with40GWcomingfromrooftopsolar.However,withlessthan5GWACofrooftopsystemsreportedlyinstalledattheendof2020,reachingthistargetisbasicallyimpossible.Notdifferentlyfrom2019,theIndianrooftopmarketfailedtogrowinconcertwithitssolarambitions.Whiletheutility-scalesegmentdynamicshavebeenquitevariedacrosstheworld,rooftopsolarhasexperiencedgrowthalmosteverywhere.ThemostnotableimprovementcomesfromVietnam,whichentirelyshifteditsmarketsegmentationtowardsdistributedsolar,withover8GWofrooftopsystemsinstalledin2020alone.Vietnamisaveryencouragingexample,showingthatthesolarindustryisnowreadytodevelopevenmoresophisticatedmarketsegmentslikerooftopPVfrombasicallyzerotoworldrecordlevelsinaveryshorttime–allitneedsistherightpolicyandtechnicalframeworkconditions,andaworkforcewiththerightskillset.Themoreadvancedrooftopsolarmarkets–Australia,Japan,Germany,SouthKoreaandBrazil–allinstalledmoredistributedcapacitythantheyearbefore.Outsidethetop10markets,thesegmentsawnotablecontributionsfrommid-sizedEuropeancountries,aregioninwhichmorethanhalfoftheannuallyinstalledcapacitywasmadeupofrooftopsystems.Theimpressivegrowthintherooftopsegmentnotwithstanding,arenaissanceofground-mountsystemscanbeobservedeveninlong-establishedsolarmarketslikeEurope.Thetrendtowardstendershasbeenprovidingthebasisforabigwaveofground-mountPVplants,likeinSpain;buteveninHolland,oneofEurope’smostdenselypopulatedcountries,thereisaboomforground-mountinstallations,thoughlandissueslimitgrowth.Thecostcompetitivenessofsolarenablingmerchant/PPAsolarsystemsalsodrivesthegrowthoftheground-mountsegment.TwoofEurope’sverysunnyandspaciouscountries,SpainandPortugal,havemulti-gigawattpipelinesforsuchPVpowerplants.ButeveninGermany,arecordsizesubsidy-freesolarplantof187MWwaspartiallygridconnectedlastyear,andseveralotherprojectsareinthedevelopmentstage.Withsolar’scompetitivenessfurtherimprovingacrosstheboard(oncethesiliconsupplyissueissolved),thePPAsegmentwillbecomeamajordriverforgroundmountedsolar.Aftera2020withmarginalgrowth,weexpecttheglobalutility-scalemarkettoreachnearly100GWandincreaseitsshareto61%alreadyin2021,whichcouldbeevenhigherifthehighsilicon/modulepriceshadnotcauseddelaysinplannedprojects.For2022,weexpecttheutility-scalesharetofurtherincreaseto64%andreach130GW.Forthefollowingyearsuntil2025,itisforecastthatutility-scaleinstallationswillmakeupto169GWglobally–andmoreorlessmaintaintheirshare.Whatcouldtiltthebalanceevenmoretowardslarge-scaleground-mountedpowerplantsaregreenhydrogenrelatedsolarpowergenerationcapacitiesthathavebeenannouncedinseverallocationsaroundtheworld,Australiainparticular.Thattrend,however,isprobablygoingtobecomevisibleonlytowardsthesecondhalfofthedecade.Nonetheless,there’salsostrongmomentumontherooftopsideofthesector.Bothresidentialandcommercialpowerconsumersarebeginningtoevolveintoprosumers,solarpanelswillturnintobuildingmaterials,andsmartcitieswillwanttoemploytheadvantagesofdistributedsmall-scalesolarincombinationwithstorageanddigitalsolutions.California’sdecisionofmakingsolaramandatorypartofnew-buildhomesasof2020hasbeenfollowedbyseveralothersub-nationalactors.InGermany,followingthestatesofHamburg,BremenandBaden-Württemberg,thecityofBerlinestablishedinJune2021amandatetoinstallrooftopPVonallnewandrenovatedbuildings.Despitethepositivedevelopmentsandthehugepotentialintherooftopmarketsegment,itssharesareexpectedtodecreaseuntil2022.Utility-scalesolarhasprovenmoreresilientduringthepandemic,andwiththesiliconshortageandhigh-pricemodulephaseassumedtoendnextyear–accordingtoourMediumScenario—rooftopsolarwillslightlydropto39%in2021froma44%sharein2020,andwillfurtherdecreaseto36%,alevelitwillbasicallykeepuntil2025.Still,inabsoluteterms,themarketforrooftopsolarissupposedtoexpandsignificantlyoverthecomingyearsbynearly60%to96GWin2025from61GWin2020.GlobalMarketOutlookForSolarPower2021-202535GET.investissupportedbyGlobalMarketOutlookForSolarPower2021-202537Off-gridsolar2IntroductionAchievingthegoalofuniversalaccesstoaffordable,reliable,sustainable,andmodernenergyby2030(UNSustainableDevelopmentGoal7)isakeytargetforemergingmarketswhenlayingthefoundationsforsustainabledevelopment.Therearecurrentlyanestimated759millionpeopleworldwidewithoutaccesstoelectricityandaround1billionpeoplewithaccesstoanunreliablegrid.WithprogressoneconomicdevelopmentandelectrificationstallingovertheCOVIDpandemic,theWorldBankforecastsroughly100millionpeopleinemergingmarketsanddevelopingeconomies(EMDEs)willhavefallenbackintoextremepoverty,increasingtheimportanceofaffordableelectricitysolutions.Off-gridsolarinstallations,thatarenotconnectedtoautilitygrid,willbekeyinansweringthisenergydemandandachievinguniversalenergyaccess.Whileoff-gridsolarplaysanimportantroleintheelectrificationeffortsofemergingeconomies,significantamountsofoff-gridinstallationscanalsobefoundintheGlobalNorth.ThissectionoftheGlobalMarketOutlookwillinvestigateChaptersupportedbyGET.invest.off-gridsolar'sroleinsupplyingglobalenergyneedsinasustainableandaffordableway.Thischapterwillbelookingatthreetypesofoff-gridsystems:solarhomesystemsandsmall-scaleapplications(SHS);commercialandindustrialinstallations(C&I);andminigrids.ThisisthefirsttimethattheGlobalMarketOutlookiscoveringoff-gridsolar.Unlikeforgrid-connectedsystemsthatmustberegisteredwithregulators,dataisnotasreadilyavailableforoff-gridinstallations,inparticularC&I,somewhatlargerself-consumptionsystemsthatareofteninstalledwithoutgovernmentsupportprogrammes.WhencalculatingtheamountofinstalledcapacityofSHSinstallations,wealsoincludedinstallationscoveringsmall-scaleapplications,e.g.,trafficlightingsystems,togiveamorecompletepictureofthetotalinstalledcapacityinEuropeandNorthAmericainparticular.Giventhegrowingattractivenessoflow-costsolarinalloff-gridsegments,SolarPowerEuropehaswrittenthischapter,withthesupportofGET.invest,toaddressthissector’scontributiontoglobalelectrificationefforts.©TarasVyshnya/ShutterstockMarketAnalysisIn2020,theglobalinstalledcapacityofoff-gridsolarcontinuedtoincreasewithmorethan1.5GWadded.However,annualgrowthinnewcapacityonlysawa9%increasefrom2019,whereasbetween2017and2019,growthhadconsistentlybeenindoubledigits.ThisslowdowncanlargelybeascribedtotheeffectsoftheCOVID-19pandemic,restrictingtheactivitiesofbusinesses.Themostsuccessfulareasfortheoff-gridsolarmarketarecurrentlytheAsia-PacificandSub-SaharanAfricanregions,whichmadeupoverthreequartersofthe2020annualoff-gridsolarPVmarketcollectively.Thisislargelyduetothenumberofpeopleandbusinessesthateitherdonothaveaccesstoelectricityorsufferfromunreliablegridconnectionandthefactthatoff-gridsolarformsakeypillarofnationalelectrificationefforts.Thetotalcapacityofoff-gridsolarinstallationshasrisenrapidlyfromtheearly2000stonearly10GWin2020.Insteadofbeingstymiedbyincreasedeffortstobringon-gridpowertopeople,off-gridsolarisincreasinglyseenastheidealpartnertoelectrificationefforts.Forexample,minigridsareusedtoprovide“lastmile”electrificationtoremotecommunitieswheregridexpansionwouldbehighlyexpensiveandtimeconsuming,thesameappliesforSHSwheregridexpansionissimilarlyimpractical.Meanwhile,off-gridC&Iprovidesacommerciallyviable,renewableenergyalternativetoexpensiveandunreliableon-gridpowerforbusinesses.Intheefforttoreachuniversalelectrificationby2030,off-gridsolutionsprovideacost-effectivewaytoelectrifyareasefficiently.Thisgrowthhasbeensupportedbypolicyandfinancinginstruments,atboththeinternationalandnationallevel,thatreflectagrowingunderstandingofthesector’simportanceandtherangeofinstrumentsrequiredtosupportit.Internationally,increasingrecognitionoftheimportanceofoff-gridsolarenergysolutions,particularlyinruralelectrification,hasledtoagrowingnumberofgrantsbeingawardedforthedeploymentofSHSinparticular.Thishasallowedmanyoff-gridcompaniestoexpandintonewmarkets,especiallywithintheSub-SaharanAfricanregion.IntermsofSHS,afurtherdriverofgrowthistherecentshiftawayfromlowwattagelightingproductstomoreexpensivesystems.Thishasbeenmadepossiblebythereductionincostofsolarequipmentfortheconsumer,withbusinessmodelsshiftingtowardsPay-As-You-Go(PAYGo).2Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202538FIGURE20ANNUALOFF-GRIDSOLARPVMARKETSHARES2020.Europe:144MW;8%AMER:164MW;10%MEA:561MW;33%APAC:838MW;49%2020©SOLARPOWEREUROPE2021Solarinvestorsinemergingmarketsfacevariouseconomic,financial,institutional,andtechnicalchallenges,includinglimitedpoliticalwillandinstitutionalcapacity,politicalandeconomicinstability,alackoftransparency,ineffectiveregulatoryframeworks,andpoorgridcapacities.Fortunately,thereareseveralinternationalsupportbodiesandinstrumentsthatexisttohelpovercometheseobstacles.OneoftheseinstrumentsisGET.invest,aEuropeanprogrammethatsupportsinvestmentsindecentralisedrenewableenergy,supportedbytheEuropeanUnion,Germany,Sweden,theNetherlands,andAustria.Servicesincludemarketinformation,afundingdatabase,matchmakingeventsandaccess-to-financeadvisoryviatheGET.investFinanceCatalyst.GET.investworksacrossseveralmarketsegments,includingminigrids,C&I,andSHS.AnotherexampleistheElectrificationFinancingInitiative(EDFIElectriFI),anEU-fundedimpactinvestmentfacilitythatfinancesearly-stageprivatecompaniesandprojects.EDFIElectriFI’saimistosupportinvestmentsthatincreaseand/orimproveaccesstomodern,affordableandsustainableenergyservices,inparticularforpopulationslivinginrural,under-servedareasaswellasregionsaffectedbyunreliablepowersupply.Afurtherpopularmodelforprovidinginternationalsupportisthroughstrategicpartnershipsbetweenseveralorganisations,suchasEnDev.EnDevbringstogetherlikemindedclimatechangeanddevelopmentorganisationstosupportsocialandeconomicdevelopmentbyprovidingaccesstomodern,renewableenergy.Onanationallevel,theoff-gridsolarindustryhasincreasinglybenefitedfrompreferentialpolicies.Thesecanrangefromlargescalesupportintheformofdedicatednationalelectrificationplans,tospecificpoliciessuchasconcessionarysystems,upfrontsubsidiesincludingresults-basedfinancing,andtargetedtariffexemptions.Futuresectorgrowthislikelytogohand-in-handwithtechnologicaladvancesintheoff-gridsector.IntheSHSsector,thetrendofimprovingqualitystandards,leadingtomoreexpensiveSHSbeingsoldviaaffordablePAYGomodels,islikelytocontinue.Increasingly,solarPVisbeingusedforcommercialends.Waterpumpsusedforagriculture,andrefrigeratorsusedbysmallbusinessesarebothexamplesofproductsthatcanbepoweredbysolarPV,andfallundertheproductiveuse,orPULSE(ProductiveUseLeveragingSolarEnergy),category.ExpansionisexpectedinthePULSEandappliancesectorsassolarsystemsincreasinglyrequirelessenergytooperate,resultinginadecreaseincosts.Asmoreinvestorsrealisethepotentialofthissector,itislikelythattheseadvancementswillbebackedbyincreasinglevelsofdedicatedfinancing,includingrisk-basedfinancingtode-riskearlydevelopmentofthesesegments,higheravailabilityofconvertibledebt,andmoreearly-stageequity.Alongsidethese,thepresenceoflocalcurrencyfinancingisduetoincreaseaslocallendersandinvestorsgainabetterunderstandingoftheoff-gridsector.Thisisvitalasitmakesdebtsmoreserviceableforcompaniesandkeepsthepriceofoff-gridpowersolutionslow.Itisexpectedthatexistingbusinessmodelswillcontinuetoevolvefrommicro-utilitymodels,wherebyoff-gridsolarproductsarerented,tolease-to-ownmodels.Whereasnowthemarketisdominatedbylarger,verticallyintegratedplayers,anincreasinglydiverserangeofbusinessmodelswillcreatethepotentialforSMEstospecialise,allowingforgrowthatscale.However,larger,alreadyverticallyintegratedcompaniesarelikelytoreceiveincreasinginterestfromstrategicinvestorslikeENGIE–providingimpactfundingtoenergyaccesscompanies,withstakesinminigridsinTanzania,Zambia,Myanmar,andSomalia.Inabidtoimproveproximitytoendusers,moreandmoreplayersareexpectedtospecialisein“last-miledistribution”intandemwithstrategicpartnershipsinthevaluechain(suppliers,PAYGoplatforms,financialinstitutions).ThiswillhavetheaddedbenefitsofdecreasingcustomeracquisitioncostsandimprovingthequalityofPAYGosalesportfolios.Asthemarketcontinuestogrow,policymakerswillbecomemoreawareofthesignificantcontributionthatoff-gridsolarcanmaketowardsuniversalenergyaccess.Thiswillseethesector’sroleinfutureenergyplanningincrease.Withpositiveexamplesofthebenefitsofoff-gridsolaracrosstheSHS,minigridsandC&Isegments,itisanticipatedthatpolicymakerswilllooktosimplifyregulatoryframeworkstocreateanenablingenvironmentforthesector.Effectivelymodernisingruralelectrificationpolicieswillalsorequireasignificantamountofsupportfromdonorsintermsoftechnicalassistanceandcapacitybuildingforstaffinpublicinstitutions,especiallyinSub-SaharanAfrica.GlobalMarketOutlookForSolarPower2021-202539OutlookWhiletheimpactsoftheCOVID-19pandemicareyettobefullyknown,therearesomethingsthatwecanascertainthusfarabouthowthepandemichasaffectedtheoff-gridsector.Typically,SHSandminigriduserstendtocomefromlowerincomehouseholds,holdingprecariousemploymentininformallaboursectors.ThesesectorshavebeendisproportionatelyaffectedbytherestrictionsimposedbynationalgovernmentstocombatthespreadofCOVID-19and,asaresult,theWorldBankestimatesthataround100millionpeoplehavefallenbackintoextremepoverty.Thiswouldhavehadaknock-oneffectoncustomers’abilitytoaffordSHS,evenonaPAYGobasis.Ingeneral,though,everysectorsawsetbacksafterconsistentgrowthsince2010,whenIFCreleaseditsfirstoff-gridlightingreport.However,resultingfromthepandemichasbeenadesiretobuildbackbetterandgreenerthathasacceleratedthedevelopmentofprograms,incentives,andinternationalfinancingforoff-gridsolar,particularlyintheSHSandminigridsegments.AccordingtoSolarPowerEurope’smediumgrowthscenario,cumulativeglobalcapacitywillmaintaindoubledigitgrowththroughto2025,highlightingthesector’sresilienceandimportanceinuniversalelectrificationefforts.Hottestoff-gridsolarmarketsSub-SaharanAfricaOff-gridsolarisparticularlyimportantinSub-SaharanAfrica,giventhatwith46%in2019,theregionhasthelowestenergyaccessrateintheworld.ThisproportionislikelytogrowastheeconomiceffectsoftheCOVID-19pandemicmanifestthemselves.Thereareseveralmoreestablishedoff-gridmarketsintheregion,suchasKenya,SouthAfrica,andTanzania.Morerecently,newermarketshavealsoseensignificantgrowthasthecostofoff-gridsolarhasdropped.Thishasalsoledtotheintegrationofoff-gridsolarintoseveralnationalelectrificationstrategies.KenyaisoneofthemoreestablishedmarketsinSub-SaharanAfrica.ItsSHSmarketisalsooneofthelargestintheworld,helpedbystronggovernmentbackingofoff-gridelectrification.TheEnergyActof2019promotestheuseofrenewableenergyandremovestherequirementforalicenseforself-consumptionsystemsunder1MW.Similarly,theKenyaElectricitySectorInvestmentProspectus2018-2022presentsclearinvestmentandfinancingopportunitiesforoff-gridelectrification.TheKenyangovernmentalsohelpedtomitigatesomeofthepotentialeffectsofthenationallockdownduringthe2Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202540©SOLARPOWEREUROPE2021FIGURE21GLOBALCUMULATIVECAPACITYOFOFF-GRIDSOLAR2016-202505,00010,00015,00020,00025,00030,000MWHistoricaldataLowScenarioHighScenarioMediumScenario2022202320242025201720182019202020219,54817%21%15%14%13%201612,52610,58014,70027,395COVID-19pandemicbydesignatingpowergeneration(includingoff-gridsolar)asanessentialservice.ThisallowedSHScompaniestocontinuetheirworkasnormal,albeitfacingincreasedsupplychaindifficultiesduetothelockdown.Inlinewiththeirpro-SHSstance,thegovernmentalsoabolishedchargesonmakingmobilemicrotransactionsunder1000KSH(10USD).However,theinitialeconomicrepercussionsoftheCOVID-19pandemichaveledKenyatoannounceanew14%VATrateonoff-gridproducts,risingto16%in2021.Thecountryishometoawell-developedminigridsector.ItsinitialgrowthislargelythankstothewidespreaduseofMPesa,amobilemoneyplatformmakingpaymentsmoresecureandreliable.Kenyawasalsooneoftheearliestcountriestointroducesupportivepoliciesforminigriddevelopment,initiallyconsistingofallowingsmallprojectstooperatewithminimaloversight.However,thishastransformedintodedicatedprogrammessuchastheKenyaOff-GridSolarProject,whichaimstoprovideelectricityto27,000householdsintheleastdevelopedpartsofthecountrybyworkinginpartnershipwithprivatecompanies.WhiletheKenyangovernmentwillowntheassets,privatecompanieswillbuildandoperatethem.OtherprojectsincludetheRenewableEnergyPerformancePlatform(REPP)providing3millionUSDofresults-basedfinancingtoaprojectthatlookstobuild100minigridsinKenya,addingatotalof1MWofgeneratingcapacity.Arelativelynascentmarketsegment,developmentsinoff-gridC&IarelessdocumentedthaninSHSorminigridsegments.Todate,KenyaboastsoneofthelargestC&ImarketsinSub-SaharanAfrica.Whiledataontheexactproportionofon-gridtooff-gridC&Iinthecountryisscarce,thecountry’srelativelyhighgridelectricitytariffs,combinedwithataxsupportedprogramme,haveincentivisedgrowththusfar.ProjectdevelopersexpectfuturedemandforC&Iinstallationstocomefromthemanufacturing,agriculturalandhorticulturalsectors.SouthAfricaisanotherlargemarketinSub-SaharanAfrica.However,givenitscomparativelyadvancedon-gridsystem,theSHSsegmentofthemarketismuchsmallerproportionallythaninothercountries.Accordingtothecountry’s2019IntegratedResourcePlan,therearestill3millionhouseholdswithoutaccesstogrid-basedelectricity.ThegovernmentplanstoelectrifytheseareaswithacombinationofSHSandminigridtechnologies.Currently,thegovernmentisquantifyingtheoff-gridopportunitysothattheycandesignpoliciesandframeworkstoaccelerateruralelectrificationanduseofoff-gridtechnologies.Itisworthnotingthatoff-gridelectrificationisseenasatemporarymeasure,untilitbecomespossibletoestablishgridconnectionseconomically.Thereisawell-establishedconcessionschemeinSouthAfricathathasbeenrunningsince2001.Underthissystem,sixconcessionaireshavebeentenderedtoprovideelectricityintheKwaZuluNatal,LimpopoandEasternCaperegions.Theconcessionregimegivestheconcessionaireexclusiverightstosupplyenergyservicesforfiveyears,withatotalservicecontractlengthof20years.Customersareexpectedtopayforconnectionsandamonthlyservicefeefortheoperationandmaintenanceofthesystem.Tospeedupelectrificationandimproveenergyaccess,theDepartmentofEnergyallowsmunicipalitiestoapplyforoff-gridelectrificationservicesintheirareas.Infurthersupporttooff-gridelectrification,theDepartmentofEnergysubsidisestheentirecostofSHS.SouthAfricaalsohasthelargestC&IsegmentinSub-SaharanAfricathankstothesimplificationofpermissionsbythegovernmentforprojectsbelow1MW.Nigeria’soff-gridmarkethasexperiencedrapidgrowthrecently.TheSHSsegmentseemsdestinedtogrowfurtherwiththeNigeriaRenewableEnergyMasterPlanaimingtodeploy4millionsolarhomesystemsby2025.SE4All’sAgendaforNigeriaforeseesacombinationofminigridsandSHScreating8GWofadditionalcapacityby2030(almost20%oftotalcapacity).TheworsteffectsoftheCOVID-19pandemicweremitigatedbytheoff-gridsectorbeingdeclaredanessentialservice,thusavoidingtherestrictionsplacedonothersectors.Theminigridsectorbenefitsfromalargelysupportivepolicyenvironment.Thedevelopmentofamulti-yeartariffcalculatorhasprovideddeveloperswithmorecertaintyaroundtheeconomicviabilityofprojects.Similarly,the2017MiniGridRegulationallowsforsmallerprojectsoflessthan1MWtoapplyforapermitthatallowsforprotectionagainstgridencroachment.Nigeriahasdedicatedfundinginstrumentstosupportitsstrategyforruralelectrification.Thegovernmenthasearmarked150millionUSDfortwophasesofminigridprojects:aminimumsubsidytender,ongoingsince2018,thatGlobalMarketOutlookForSolarPower2021-202541targetstheelectrificationofruralareaswithahighgrowthpotential;andaresults-basedgrantthatrewardsthedevelopmentofminigrids,throughdevelopers’owninitiatives,with350USDperconnection.C&IisalsopopularinNigeriagiventhelargecorporatesectorinthecountryandproblemswithfrequentandextendedpowercuts.Theoff-gridC&Isegmentisboostedbylicencesnotbeingrequiredforprojectsupto1MW.Intermsoffuturedevelopments,initsSE4AllActionAgenda,theNigeriangovernmentplanstohave5,000MWofC&Iinstalledby2030,althoughtheproportionofon-gridtooff-gridinstallationsisnotclear.SenegalwasoneoftheearliestcountriesinSub-SaharanAfricatodevelopsupportivepoliciesforoff-gridsolar.TheSHSmarketinSenegalisgrowingquicklyandwhilecashsalesstilldominate,PAYGosaleshavemanagedtopenetratethemarketsuccessfully.Governmentpoliciesfromthelate1990sdevelopedareliableframeworkforprivatedevelopmentofSHS,whichattractedalotofinvestmenttothesector.DuringtheCOVID-19pandemic,theSenegalesegovernmentalsodesignatedoff-gridsolarcompaniesasanessentialservice,largelyexemptingthemfromtherestrictionsimposedduringnationallockdowns.Senegalprovidesfertilegroundforminigrids,notleastbecauseofitstypicallydenseruralcommunities.Minigriddevelopmentisorganisedthroughaconcessionsystem.TheSenegaleseconcessionarysystemhasbeenoperationalsince1998butcumbersomebureaucraticprocessesmeantittookfiveyearstoawardtheinitialconcessionandafurtherfivetoconnectthefirsthousehold.Similarly,developersclaimedthatSenegal’stenconcessionregionsweretoolargetoeffectivelycarryoutelectrificationprojects.In2018,theSenegaleseRegulatoryCommissionfortheElectricitySector(CRSE)wastaskedbythegovernmenttoconductanauditoftheconcessionsysteminanattempttobetterunderstandtheobstaclesfacingconcessionaires.TheSenegalesegovernmentiscurrentlyconsideringreformstothesystembasedontheauditresults.ThoseareasnotcoveredbytheconcessionsystemfallintotheremitoftheLocalRuralElectrificationInitiative(ERIL)programmethatencouragesvillagelevel,communityledprojectsforelectrification.Theoff-gridC&IsegmentinSenegalisnotwelldocumented.However,givenproblemsaroundpersistentpoweroutages,itislikelythatoff-gridC&IinstallationsareparticularlyattractivetoSMEsinthecountry.Akeypolicyinsupportself-generationisthatexcesselectricitycanbesoldtothenationalutilitySENELEC.Morerecently,inMarch2019itbecamepossibletosellexcesspowertoactorswithaconsumptionof1MWorover.2Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202542©Zola.Tanzania,alongwithKenya,isresponsiblefortheinitialgrowthoftheSub-SaharanAfricanoff-gridsectorand,assuch,hasareasonablydevelopedmarket.ItsSHSsectorwasknownforitsvolatilitybutstabilisedandexperiencedsteadygrowthfrom2017–2019.ItisstilluncertainhowthemarketwillrespondtotheCOVID-19pandemicbuttherearealreadyencouragingsignssuggestingthatitmaybeabletobounceback.TheSHSsectorisonlylooselyregulated,witharequirementforcompaniestoinformthenationalregulatoroftheiractivities.ThereisalsoarequirementforproductstomeettheLightingGlobalstandardsforsmallrenewableenergyandhybridsystemsforruralelectrification.WhileTanzania’spolicyframeworkhadpreviouslybeensupportiveofminigriddevelopment,recent,ongoingregulatorychangeswillhaveanimpactonthepreviouslyagreedtariffs,potentiallyaffectingthefinancialviabilityofprojects.However,theminigridmarketstillcontinuestoinnovateand2019sawthelaunchofthefirstprojectfinancingfacilityforminigridswithaninitialfundingcommitmentofroughly16.5millionUSD.Moreover,aspecialpurposevehicle(SPV)hasbeensetuptopurchaseexistingandfutureminigridsfromPowerGenRenewableEnergy,helpingtosourcelongtermfinancingforsitesandenablethedevelopertobreaknewground.TanzaniahasafavourablepolicyenvironmentforC&Iwithgeneratorsabletosellexcessenergytothegridandbalancetheirusethroughnetmetering.Ontopofthis,smallergeneratorsareexemptfrommoreburdensomelicensingrequirements,whiletheoperationalcostsavingsareattractiveforlargergenerators.Whileavailabledatadoesnotclearlydistinguishbetweenoff-gridandon-gridsolar,giventherelativelylowelectrificationlevelinTanzania(38%)itisreasonabletoassumethatthesetrendsstandforoff-gridC&Iingeneral.Ugandaplacesahighstrategicimportanceonprovidingaccesstomodernenergyservicesthroughrenewableenergy.Assuch,thedomesticSHSmarketisthriving,withuptakeincreasing.ThishasalsobeensupportedbypoliciessuchasaremovalofVATonsolarproductsin2005,withtheaimofreducingprices.MinigridsareanotherkeypillarofUganda’sRuralElectrificationStrategyandPlan(RESP)whichtargets8500connectionsfromminigridsby2022.Currentlyaminigridspecificregulationandtariffcalculationmethodologyareunderdevelopment.Thecountry’sRuralElectrificationAgency(REA)supportsdevelopersbyprovidingthedistributioninfrastructureforminigrids(includingnetworkinstallationandestablishingconnections)freeofcharge,providingtheyfallwithinanREAareaofinterest.ThissignificantlyreducestheCAPEXofprojects.Uganda’sC&Imarketisalsoworthnoting,giventheextentofitsdevelopment–thereareroughly30installersandsuppliersactiveinthecountry.MostC&Iinstallationsfocusonfarmingandofficeblocks.ThereareseveralothernotableplayersintheSub-SaharanAfricanregion.ZambiahasaparticularlyvibrantSHSmarket,wherebothdemandanduptakehadbeengrowingsteadilybeforetheCOVIDpandemic.Thisgrowthwashelpedbyreasonablylightregulatoryrequirementsandlicensingprocesses.Côted’IvoirealsohasasteadilygrowingSHSmarket.Thegovernmentiscurrentlydevelopinganoff-gridstrategy.However,itisprioritisingruralelectrificationthroughgridextensioninthecountry.Itisworthnotingthatthecriteriaforbeingincludedingridextensionswouldleaveapopulationofroughly5millionpeoplewithoutgridconnection.Ethiopia’sSHSmarketisoneofthelargestinSub-SaharanAfrica.Whilethegovernmentaimstohavepracticallytheentirepopulationgrid-connectedby2030,theeffectsofthepandemicmaymeanthatSHSwillneedtobridgethegapintheinterimuntilgridextensionscanbecompleted.Itisexpectedthataround35%ofhousesinEthiopiawillbepoweredbyoff-gridsystemsuntilgridconnectionscanbeachieved,with16%ofthosehousesbeingpoweredbyminigrids.ThankstothedevelopmentofatariffcalculatorforminigridsandtheestablishmentoftheUniversalEnergyAccessProgramme,whichmakesprovisionforIPPs,privatesectorparticipationintheminigridsectorisbecomingincreasinglypossibleandeasy.Arecentcallforproposalswasreleasedfor25sites,asthefirsttrancheofaplantodeveloproughly300minigrids.WithsomeofthehighestelectricitytariffsinSub-SaharanAfrica,itisnosurprisethatGhanahasaparticularlyactiveC&Imarket.However,thegrowthofthismarketissomewhatlimitedbydomesticcontentrulesandinterestratesofaround30%forCedi(localcurrency)loans.NamibiaalsohasahighlydynamicC&Imarket,drivenbytheneedforareliableenergysupply.Namibia’snationalgridispoweredbytheSouthAfricanpublicutilityEskomandoutageshavebecomemorefrequentinrecentyears.ThebulkofC&Iinstallationsarecentredoncommercial,tourism,manufacturing,andextractiveindustrysectors,withshoppingcentresbecominganincreasinglyimportantsub-segmentfortheC&Imarket.GlobalMarketOutlookForSolarPower2021-202543AsiaPacificTheAsiaPacificmarketisamoredevelopedmarketthantheSub-SaharanAfricanoneandhasbeeninexistencesincetheearly2000s.Despiteconcertedeffortsonthepartofnationalgovernmentstoimproveon-gridelectrification,inIndiaandBangladeshinparticular,technicallimitationsmeanthatoff-gridsolarisconsideredasacomplementarytechnologytogridextensions.Meanwhile,thePacificIslandshavelongbeendependentonimportingexpensivefossilfuelstomeettheirenergydemand.However,manyarenowtransitioningtoarenewableenergy-dominatedenergymix.ThePacificIslandsrepresentahighgrowthpotentialforoff-gridsolar,withmanyislandnationslookingtoreducetheirdependencyonimportedfossilfuels.ThereareseveralprogrammesrunbytheAsianDevelopmentBank(ADB),thatlooktopromotetheuptakeofrenewables.Forexample,thePacificRenewableEnergyInvestmentFacilitystreamlinesADBandotherDFIinvestmentsinthe11smallPacificIslandnations.Combined,thefacilitydeploysaround700millionUSDforsmall-valuerenewableenergyprojects.Alongsidethis,thefacilityalsooverseesenergysectorreforms,promotesprivatesectorengagementandinvestmentopportunities,preparesfurtherinvestmentchannels,anddisseminatesbestpracticesandlessonslearned.TheADBalsoprovidescapacitybuildingandadvisesonenergysectorreformwithaviewtoincreasinginvestment.TheyalsoseektoencourageprivatesectorinvestmentthroughthePacificRenewableEnergyProgramme.Here,theADBusesdonorfundstounderwritethepaymentobligationsofpowerutilities.Thisisdesignedtomitigateanyshort-termcapitalriskandencouragelong-terminvestmentthroughapartialriskguarantee.IntermsofspecificPacificIslandsprojects,Tonga’sOuterIslandRenewableEnergyProjectisseekingtoconvertfourcommunity-owneddieselminigridsontheouterHa’apaiislandsintosolar-dieselhybrids.Theminigridsrangeinsizefrom70kWto150kW.TheprojectalsoseekstoexpandtheexistingSHScapacityinNiuafo’ouandNiuatoputapuwithanadditional180kWofsystems.InMicronesia,ahybridsolar-dieselminigridisbeingupdatedinWalungwithanadditional60kWofsolarPVgeneration,30kWofdieselgenerationand30kW,or160kWh,ofbatterystorage.PapuaNewGuineahasbenefitedfromthePawarimKomunitiprogramme,launchedbytheAustralianDepartmentforForeignAffairsandInternationalTrade.Thisschemeoffersgrantfundingtooff-gridprojectsinremoteareasofPapuaNewGuinea.TheprogrammeisapartofthewiderPNGElectrificationPartnershipprogrammethathasthegoalofdeliveringenergyaccessto70%ofthecountryby2030.Bangladeshisatraditionallystrongmarketintheregion,withawell-established,nationallevelSHSprogrammetargetedatruralpopulationsnotyetservedbygridconnections.Thisprogrammestartedin2003andendedin2018.Overthistimespan,over4.1millionSHSweresold,bringingenergyaccesstoaround20millionpeopleor14%ofBangladeshis.Intotal,1,095millionUSDwasinvestedovertheproject’slifetime.SeveraldevelopmentpartnersprovidedforeigncurrencygrantsandloansonsofttermstothegovernmentofBangladesh,whichthenconvertedthisintolocalcurrencyfundingtoprovideloansonsofttermstotheimplementingorganisation,theInfrastructureDevelopmentCompanyLtd(IDCOL),to,inturn,provideloanstopartnerorganisationsthatmarketed,sold,installed,andmaintainedSHStoruralhouseholdsinBangladesh.Theseloansreducedtheburdenofthetotalcostpaidbytheconsumer.Bangladesh’s2016PowerSystemMasterPlanforesawtotalelectrificationinBangladeshby2021.However,currently,electrificationstandsat85%,suggestingthatthereisstillroomforinvestmentinoff-gridsolarsolutions.Givenrecentadvancementsingridextension,theneedforanoff-gridC&Isegmentislower.However,thegovernmentdoesprovideforpowerpurchasingfromC&Iinstallations,butthetariffsareanchoredatsamelevelastheBangladeshPowerDevelopmentBoard.Indiahasseveralprogrammesinplacetosupporttheuptakeofoff-gridenergy,mainlythroughsolarPV.In2015,theDeenDayalUpadhayaGramJyotiYojana(DDUGJY)programmewaslaunched.DDUGJYsupportstheoff-gridelectrificationofruralIndia.Thisparticularschemeismainlyaimedatminigriddevelopment.India’sNationalSolarMissionhasatargetofinstalling2,000MWofoff-gridsolarforareaswheregridextensionisnoteconomicallyviable.In2017,theMinistryofNewandRenewableEnergylaunchedtheOff-GridandDecentralisedSolarPVProgrammetosupportthisaim.TheprogrammedeliversSHS,solarstreetlights,solarpumps,andlanternstoruralareas.In2Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202544GlobalMarketOutlookForSolarPower2021-202545December2018,thesecondphaseoftheAtalJyotiYojana(AJAY)programmewaslaunchedtoprovidefinancingandinstallationofover3millionsolarstreetlightsaroundthecountry.In2019,theIndiangovernmentlaunchedthePM-KUSUMscheme.Theprogrammehasthreecomponents,oneofwhichincludessupportingfarmerswithoutgridconnectionstoreplace1.75millionolddiesel-poweredpumpswithoff-gridsolarpumps.Whiletheoff-gridC&Isectorisnotwidelyreportedon,EDFIElectriFIrecentlyinvested2.68millionEURinanIndianC&Irooftopfirm,calledCandi,whichprovidesinstallationandO&Mservicesforoff-andon-gridclients.CandiofferssubstantialsavingstoSMEscomparedtogridpower.However,theC&ImarketinIndiaissufferingfromalackofsuitablefinancialsolutionslikelongertenordebtfinancingforassets.Pakistan’soff-gridsolarmarketisstillnascent.However,thisislikelytochangeinthecomingyears,thankstothe2019Alternative&RenewableEnergyPolicy.Thepolicyidentifiesseveralregulatorybarriersforoff-gridsolar,suchasSHS,minigridsandoff-gridC&Ihavingtousethesamelicensingregimeasutility-scalesolar.ThepolicycallsfortheNationalElectricPowerRegulatoryAuthoritytodesignamorestreamlinedandbespokelicensingprocedureforoff-gridrenewables.ProjectsinthecountryincludetheSindhSolarEnergyProjectthatwasfinancedbytheWorldBank.Thisinitiativeprovided200,000SHStopeopleindistrictswithlowenergyaccess.Themainfundingsourceforoff-gridprojectsinPakistanaremicro-financeinstitutions.ThesewereparticularlyaffectedbytheCOVID-19pandemic,theimplicationsofwhichthreatenedtoderailtheoff-gridmarket.However,theGermandevelopmentbankKfWreleasedthefirsttrancheof17millionUSDloantothePakistanMicrofinanceInvestmentCompanyandthisshouldstemcashflowissuesintheshortterm.Thereareseveralotherinterestingoff-gridmarketsintheAPACregion.Vietnamsuffersfromrelativelyhighelectricitytariffsandthereisaburgeoninginterestinoff-gridC&Ipowersolutions.Thailandhasthemostmatureoff-gridC&IsectorintheAsia-PacificregionduetohighelectricitytariffsandrelaxedregulationsaroundprivatePPAs,makingthissegmentparticularlypopularandwide-spread.OtherregionsWhilethischapterhasfocusedpredominantlyonoff-gridsolarintheAsia-PacificandSub-SaharanAfricanregions,thisisnottosaythattherearenodevelopmentsinotherregions.In2020,theMiddleEastandNorthAfrica(MENA)regioninstalled192MWofoff-gridsolarandtherateofgrowthofoff-gridsolarPVisexpectedtoincreaseuntil2023.InSaudiArabia,the©AfricanDevelopmentBankMutajadedahproject,designedbytheSaudiIndustrialDevelopmentFund,offers12yearsoffundingforoff-gridC&Iinstallationswithathree-yeargraceperiodandlowinterestrates.Thecountryisalsoduetoopenanewbatteryproductionfacilitythatwillproducestoragesystemsfortelecomtowers,miningsites,remotecitiesandoff-gridlocations.Central&NorthAmericasawover100MWofoff-gridsolarinstalledin2020.However,thisgrowthrateislikelytoremainsluggishinthefuture.Countrieswithhighpotentialforoff-gridsolarintheregionareElSalvador,Guatemala,Honduras,Nicaragua,andPanama,becauseoftherelativelylowlevelsofelectrificationandthehighpriceofdieselgenerationincomparisontotherestoftheregion.AsimilarstorycanbetoldforSouthAmerica,whereinstallationgrowthhasfluctuatedaround30MWperyearsince2015.Interestingly,thisrateofgrowthisexpectedtoincreasemarkedlybetween2023-2025,postingdoubledigitfiguresofover20%accordingtoSolarPowerEurope’smediumscenario.Notably,ColombiaandPeruhavelargeruralpopulationsandhighdieselgenerationpricescomparedtotherestoftheregion,makingthemattractivepotentialmarketsforoff-gridsolar.Uruguay,despiteits98%electrificationrate,hasthehighestdieselpricesintheregion,makingitapotentialmarketfortheoff-gridC&Isector.InEurope,over100MWofoff-gridsolarwasinstalledin2020.Themostpopularapplicationsincludeoff-gridC&Iforcompanieslookingtoimprovetheirsustainabilityandreducethecostoftheirenergybillandresidentialoff-gridsolarprojectsintheScandinaviancountriesinparticular.MarketsegmentsSolarHomeSystemsWhiletheSHSsectorhasbeenaroundforover20years,ithasevolvedrapidlyveryrecently,growingfrom1billionUSDannualturnoverin2018to1.75billionUSDin2019.With759millionpeoplegloballywithoutaccesstoelectricityand1billionpeoplewithanunreliableconnection,thereisaready-mademarketof1.8billionpeopleforwhomSHScouldprovidebetterqualitypowersolutions.Despiterapidelectrificationprogressaroundtheworld,SHSplayanevenmoreimportantroleinthenationalandruralelectrificationstrategiesofseveralgovernments.ThisisbecauseSHSareincreasinglybeingseenastheidealpartnertoelectrificationefforts.Forexample,SHScanplayavitalroleinelectrifyingremotecommunitieswheregridexpansionwouldbeexpensiveandtimeconsuming.Intheearly2000s,SHSproductscomprisedsimple,lowwattagelanterns(0–3W).However,thankstotechnologicalimprovementsandthelowercostofsolar2Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202546©Turistföreningen.GlobalMarketOutlookForSolarPower2021-202547technology,therangeofproductsnowincludesmoresophisticatedandefficientSHSofover100W,capableoflightingahomeandpoweringseveralappliances.FromcashsalestoPAYGoThelongeststandingSHSbusinessmodelisacashpaymentupfrontand,giventherelativelyinexpensivesystemsatthelowerwattageendoftheSHSscale,thisremainsthepredominantbusinessmodelinthissegment.However,amorerecentdriverofgrowthhasbeenashiftawayfromtheselowercostitemsinfavourofmoreexpensiveproductsbasedonapay-as-you-go(PAYGo)basis,improvingthefinancialsustainabilityofthesector.Attheirbase,PAYGosystemsoffercredittocustomers,removingtheinitialfinancialbarrierofpurchasinganSHSandinsteadpayingthecostinmoremanageableinstalments.TherearethreemaincategoriesofPAYGocompanies:distributedenergyservicecompanies(DESCO)thatprovideastipulatedlevelofenergyserviceinexchangeforpayments;rent-to-owncompanieswhoretainacertainlevelofownershipofanSHSthattransferstothecustomeroncetheyhavepaidforthesysteminfull;andB2BcompaniesthatsupplysoftwareandhardwaresupportacrosstheSHSvaluechain(installation,maintenance,last-mileenergyserviceandpaymentlogistics).SHSfinancingTherearethreemainsourcesoffinancingfortheSHSsegment:internationalgrantfunding;debtfunding;andequityfunding.Thesectorwitnessedarecordlevelofgrantfinancingin2020(29millionUSD)accordingtoGOGLA.Thiswasdesignedtohelpexistingcompaniesenternewmarketsandtrynewbusinessmodelsandproducts.Itwasalsousedtofundearly-stagecompanies.SomeofthegrantfundingincreasecanbeattributedtotheelectrificationofruralhealthcentresasvitalfrontlineservicesduringtheCOVID-19pandemic.Incomparison,theshareofequityfinancingintheoverallblendplummetedbynearlyhalf.Thisfallcanbedirectlylinkedtotheeffectsofthepandemic–thedifficultiesofcompletingequitytransactionswasincreasedduringthepandemicastheabilitytoundertakeduediligenceonthegroundduringcorporateacquisitionswasseverelyhampered.Debtfinancingabsorbedthisloss,increasingitsshareinthefinanceblendfromaround54%in2019to65%in2020.GOGLAattributesthemajorityofdebtinvestmentstoimpactinvestors,DFIs,andcrowdfundingplatforms,suggestingagrowingimportanceofthesocialimpactsofoff-gridelectrificationinthemindsofdebtproviders.Whilethefulleconomiceffectsofthepandemicareyettobefelt,therelativestabilityofcapitalflowsduringthisperiodisareassuringsignofinvestors’confidenceintheoff-gridindustry’sbusinessmodelandabilitytodeliverimpact.Finally,localcurrencyfinancingisexpectedtoplayabiggerroleinthefuture,asoff-gridsolargainsimportanceinnationalelectrificationeffortsandexpertisedevelopsamonglocalfinanceinstitutions.CASESTUDY1:AMPEDINNOVATIONPBCSupportedby:150Woff-gridSHSpowering50,000householdsacrossSub-SaharanAfricaandSoutheastAsiaAmpedInnovation’sproductsaretargetedatlowerincomeareasthatdonothavegridconnection.Theyfillanaffordabilitygapthatexistsbetweensolarlanternsandhavingaccesstosignificantlevelsofpowerthatwouldprovideabasisforearningadditionalincome.Theirfocusisonabottomofthepyramidmarketthatissignificantinsizeandwheretheopportunityforimpactishuge.Initially,AmpedInnovationstruggledwiththeassumptionofseveralotheroff-gridmarketplayersthatsolarpoweredapplianceswouldnotgaincustomertractionorgenerateenoughrevenuetomaketheirbusinesssustainable.Furthermore,initiallyalotofcompaniesintheoff-gridsectorwereverticallyintegratedwhichmadefindingdistributionpartnershardforAmpedInnovation.However,throughspecialisingindesignandproduction,theywereabletoreducetheirneedforfinancingandprovidetheblueprintforamodelthatcouldeasilybescalediftheyfoundwillinginvestors.Ampedisaventure-backedB2BsocialenterprisethatsellsSolarTV,Lighting,andBusinessKitsthroughdedicateddistributorsinover20low-incomecountries.Theyproducethesesolarappliancesanduseanetworkoflast-mile,PAYGoenableddistributorstogettheirproductstotheareaswheretheyareneeded.Theyalsousethisnetworktogetintelligenceondemandfornewproductsandusethisinfuturedesigns.AmpedreceivesequityfundingfromFINCAadventures,whichitconsidersaparticularlygoodmatchasFINCAspecialisesininvestinginearly-stagecompanieswithbusinessmodelswheresocialimpactandrevenuesgrowtogether.Asanunbundledcompany,italsomakessenseforAmpedtogetspecialistequityinvestorsonboardwhocanapplytheirexpertisewhenneeded.Comparedtoothertechindustries,theenergyaccesssectorhasgenerallysufferedfromalackoffundamentalinnovation.ThisisnotsurprisinggiventhatmanycompaniesarereluctanttoinvestR&Dintoacustomersegmentthatearnslessthan4USDperday.Meanwhile,Ampedhasdoubleddownondesigningappliancesfromthegroundupexactlywiththeseusersinmind,withthebeliefthatbuildingabrandthatstandsforperformance,quality,andaffordabilitywillunlockamassiveuserbasethatisworththeinvestment.Ampedtelevisionsarebuiltwithcustom,high-efficiencyLEDstrips,customLEDcontrolcircuitrywithsmartenergycontrol,built-inPAYGO,andmotherboardfirmwarethatlimitsexcesspowerdraws.TheAmpedsolargeneratorhasnofragileparts,anditisheatanddustproof.Unlikeothersolarinverters,Ampedclaimsitcanrundailyandproductiveuseappliances,includinglargefridgeswithcompressors,grinders,andbeltsanders.TheAmpedsolargeneratorisaffordableduetoitsminimalistdesign(one-tenththecomponentsofcompetingsystems)andcomeswithbuilt-inpaymentplans,meaningthecostisrecoupedwithinayear.Ampeddoesnotseeelectricityasanendinitselfbutassomethingthatcanbeusedtopowerthingsthatimproveproductivityandqualityoflife.Theirproductlineisexpandingtoincludeinexpensiveproductiveuseapplianceslikesolar-poweredicemakers,waterpumpsandmaizegrinders,allowingclientstogenerateincome.Thehopeisthenthatthiscancontributetopeoplemovingoutofpoverty.2Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202548GlobalMarketOutlookForSolarPower2021-202549AcustomerinUgandausestheirnewlyinstalledAmpedInnovationSHStochargetheirphone.©Finca.2Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202550CASESTUDY2:NAMENESOLARCarbonoffsettingwithsolarlightsJustover53%ofNamibia’stotalpopulationhaveaccesstoelectricity.InZambia,thatnumberislessthan40%.Withoutreliablepower,manyfamilieslighttheirhomeswithtoxicandexpensivecarbon-pollutingkerosenelamps.Thesecustomersrepresentahugemarketopportunity,tosimultaneouslygivemillionsofpeoplefirst-timeaccesstomodernenergy,andcutcarbonemissions.NameneSolar’sGoldStandard-certifiedcarbonoffsettingprojectsinNamibiaandZambiaarefinancedbythesaleofcarboncredits.Thesearegeneratedbythecarbonsavingsofthesolarlights,witheverysolarlightcertifiedtoreduceCO2emissionsby92kgperyear.Buttheimpactofeachlightgoesfarbeyondcuttingemissions.Thesolarlightsaredesignedtobeeasilyandrapidlydeployedatscale,throughcommunityhubsthatsimplifydistributiontoruralandperi-urbanareas.Theyarepocket-sizeandlightweight,whilealsobeingversatileanddurable.Theyaredesignedforusebothindoorsandoutdoorswithtwobrightnesssettings-34lumensfor5hoursofuse,or13lumensfor16hoursofuse,andchargeviaaninbuiltPVpanel.Throughcarbonfinancing,thelightscanbesubsidisedwhichmakesthemtrulyaffordable,withouttheneedforadebtburden,forlow-incomecustomersinoff-gridandruralareas.Customersthatpurchasealightimmediatelybenefitfromarenewablesourceoflightthateliminatesthecostoffuelforfossil-fuellighting.Theyalsocuttheriskofrespiratorydiseasefromindoorpollutionandnolongerlivewiththefireriskofopenflamelighting,likecandles.Thelightsalsogivechildreninoff-gridhomesachancetostudysafelyaftersundown,withoutthedangeroffirefromcandlesortheirritationtotheireyesfromthetoxic,low-qualitylightgivenoffbykerosenelamps.Asignificantchallengeinthedevelopmentoftheprojectisthelengthyprocesstocertifyeachprojectonacountry-by-countrybasis.Asateam,NameneSolarwererequiredtosubmitseveralroundsofconsultation,evaluationanddatamonitoringtoadheretothehigheststandardsinthevoluntarycarbonmarket.Butcommitmenttotheproject’soutcomesandperseverancethroughtheprocessisthekeytothesuccessoftheprojects.ThefirstcarboncertificatesareexpectedtobeissuedinQ42021fromthe1.3millionsolarlightscurrentlybeingdistributedacrossNamibiaandZambia,andyetmoreprojectsarebeingdevelopedacrossAfrica.ThisnetworkofcarbonoffsettingsolarlightprojectsisjustoneofthewaysthatNameneSolarisbringingaffordable,reliablesolartooff-gridhomes.©NameneSolar.NameneSolarlightssave92kgCO2eachyearbyreplacingfossilfuel-basedkerosenelamps.MinigridsTheminigridmarketisalsonotaparticularlynewone,giventhat,atsomepoint,allpowergenerationwasdecentralised.Today,evolutionhasreachedwhatiscommonlyknownasthethirdgenerationofminigridsthatareeitherrunexclusively(orpartially,asissometimesthecasewithhybridsystems)onrenewableenergy,comparedtothesecondgeneration,builtpredominantlyin1980s–90sandpoweredeitherbyfossilfuelsorbyhydropower,andthefirstgeneration,builtin19thand20thcenturiesinindustrialeconomiesandlaterconvertedintocentralisedgrids.WhileSHSareparticularlyusefulinremoteareaswithlowpopulationdensity,minigridsprovideaneffectivewaytopowerareasthataretooexpensiveforthemaingridtoreach,butthathavealargeenoughpopulationanddemandforpowersupply.MinigridsaresignificantlymoreexpensivethanindividualSHSsystems,withcablingforeachconnectionconstitutinganadditionalissuethataffectsoverallcost.Therefore,demandforenergymustbesufficientlyhightomakeaminigrid-basedsolutionviable.Giventhatenergydemandisgreatestatnight,solarPVminigridsrelyonbatterystoragetosupplyconsumption.Batterystorageisakeycomponentofanyminigridsystem.Thereareseveralpossiblebusinessmodelsforminigridsthathighlighttheadaptivenessofthemarketindifferentcontexts.Perhapsthemostcommoncategoryofbusinessmodelistheutilityoperatormodel,wherebyanationalutilityownsandoperatesminigridsystems,chargingcustomersforthesupplyofelectricity.Thesechargescanbeequivalenttoelectricitypaymentsforgrid-connectedelectricitysupply,but,giventhenatureofcommunitiesthatminigridsserve,theyaresometimessubsidisedbychargespaidbyon-gridcustomers.Public-privatepartnershipsarealsocommonintheminigridmarket.Inthismodel,minigridsareownedandfinancedbyapublicsectorentitybutareoperatedbyaprivatecompany.Wherethegovernmenthasnoroleintheownershipofaminigrid,theyoftenprovideincentivesandsubsidiestodeveloperstoconstruct,ownandoperatetheminigrid.Thesecancomeintheformsofpreferentialloansorgrantsorasresults-basedfinancingthatprovidesalumpsumwhenprojectmilestonesarereached.Inverylimitedcases,ownershipoftheminigridlieswiththelocalcommunityitserves.Therearethreekeytypesoffinanceintheminigridsegment:debt;equity;andgrants.Withinthese,therearemultiplefinancingstructuresavailable.Grantstendtocomeinoneoftwoforms,eitherasresults-basedfinancingoranupfrontpayment,paidbythehostgovernmentandsuppliedthroughdevelopmentfinanceinstitutions(DFIs)andotherdonors.TheadvantageofgrantfundingisthatitprovidesaquickwaytorecouptheCAPEXofaprojectandanyrepaymenttermsarelikelytobemorefavourabletothedeveloperthanstandardcommercialloans.Atthesametime,applyingforgrantfundingishighlycompetitiveandoftentheproportionofCAPEXrecoupedisnotparticularlyhigh.This,inturn,iswhymostminigridprojectsarefundedthroughamixtureofgrantsandequityfinance.Equityfinancecanberaisedthroughvariousavenues,includingcapitalthatbelongsdirectlytothedeveloper,orthroughprivateequity.Mostequityinvestorsintheminigridsectorareearly-stageimpactinvestorsthatputanemphasisonthesocialtransformationachievedbyprojects.Raisingequityfinancingcanbeeasierthancompetingforgrants,butinvestorsexpectareturnoninvestmentsandwillbelesslikelytofunddeveloperswhodonothaveamoreextensivetrackrecord.Farlesscommonintheminigridmarketisdebtfunding.ThemainsourcesofdebtarestillpreferentialloansprovidedthroughDFIsandnationalgovernments.Whiletheseusuallyhavelowerinterestratesandalongerrepaymentperiod,theytendtobeprovidedinUSDandcanbehardtorepaywhentheexchangeratesoflocalcurrencies,inwhichthedevelopersarepaidbycustomers,fluctuate.Whilestilluncommon,specialistdebtprovidersareincreasinglyinvestinginprojects.Giventhatminigridstendnottobeverylargescale,developerswilloftenbundleaseriesofindividualprojectstogetherinaportfoliotoimproveinvestmentattractiveness.GlobalMarketOutlookForSolarPower2021-2025512Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202552CASESTUDY3:HAVENHILLSYNERGYLIMITEDSupportedby:Deliveringlastmileelectricityconnectionsto10,000peopleinNigeriaOver90millionNigerianscurrentlylivewithoutelectricity.Themajorityofthesepeopleliveinoff-gridcommunitiesacrossthecountry.Nigeria’scurrentlyunstablegridextensionplanandtheinefficienciesinthepowersectorpresentanimmenseopportunityforprivatebusinesses,likeHavenhill,todeploysolutionstofulfilelectricitydemand.Toimproveenergyaccess,HavenhillSynergyLimited,isdesigninganddeployingsmartsolarminigridsingrowth-readycommunities.Thefirststepintheprocessinvolvestheidentificationofcommunities,wherethepotentialforeconomicdevelopmentishigh,fromtheRuralElectrificationAgencyofNigeria’sdatasetofover10,000communities.HavenhillidentifiesthesecommunitiesusingGIStools,localgovernmentsources,andon-siteinspections.Onceeligiblecommunitieshavebeenidentified,thecompanythenconductsathoroughenergyassessmenttomakeafinalselection.Thisprocessthenleadstothedesignoftheenergysystemtobedeployedineachcommunity.Sofar,Havenhillhasfourminigridsinoperationswhichcurrentlyservestheenergyneedsofover10,000people.TheKigbesolarminigridcombines20kWofsolarPVgenerationwithleadacidbatterystorage.TheminigridinKwakuisslightlylargerat30kWandrunsonasolarand90kWstoragemodel.Yebu’sislargerstillat40kWwith144kWofstorage.ThelargestistheBudo-Areminigridwhichis100kWinsizeandisasolar-dieselhybridgenerator.Passionateaboutitsmissionto“endblackout”inNigeria,thecompanyhasrecentlycommenceditscommercialscale-upphasewithplanstoscaleitsminigridsolutiontoaminimumof100communitiesinNigeria.InMarch2021,Havenhillclosedadebtfundingof4.6millionUSDfromtheChapelHillDenhammanagedNigeriaInfrastructureDebtFund.WiththefundingstructuredthroughanassetHoldCo,thecompanyaimstodeployitssystemto22communities.Havenhilloperatesautilitymodelacrosshostcommunities.Theuserspayfortheelectricitytheyconsume.Eachcustomer’spremisesisequippedwithasmartmeterwhichhelpsthecompanywithbillingandeffectivecustomerservice.ThoughHavenhillhasbigambitionsforitsenergyaccessprojects,thebusinessmodelisnotwithoutchallenges.First,projectdevelopmentactivitiescostalotofmoney.So,duringitsearlydays,thecompanyhadchallengeswithfundingthishugecost.ThegrantfromtheUnitedStatesTradeandDevelopmentAgencyhelpedeasethischallenge.Anothermajorchallengefacedbythecompanyisthelackofappropriateownfundingforthesetypesofprojectstocomplementexternaldebtfunding.EnergyaccessisrelativelynewinNigeria,socommerciallendershavenotreallyinvestedmuchinthesector.Thismakesitdifficulttoachievefinancialcloseforprojects.Havenhillnowaimstodeliverover100,000newelectricityconnectionsoverthenextthreeyears.Beyondelectrons,theseminigridshavesofarcatalyzedeconomicactivitiesinhostcommunities,servehealthcarefacilities,andoveralldeliveratransformativemultipliereffect.AllthismeansHavenhillgeneratesbothprofitandimpactforitsstakeholders.Havenhill’sscaleupplaniscurrentlysupportedbyseveralindustryandfinancialpartnersincludingtheGET.investFinanceCatalyst,UnitedStatesTradeandDevelopmentAgency(USTDA),andothers.GlobalMarketOutlookForSolarPower2021-202553©HavenhillSynergyLimited.BudoAaresolarminigridinNigeriapoweredbya100kWPV-dieselhybridsystem2Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202554CASESTUDY4:EARTHSPARKINTERNATIONALSupportedby:ElectrifyingtworuralcommunitiesinHaitiusinginnovativesmartsolarPV-dieselhybridminigridsEarthSparkInternationalhasbuiltandoperationalisedtwosmartsolar-dieselhybridmicrogrids,withstorage,inHaiti.Haiti’selectrificationratewas25%whenthefirstminigridwasinauguratedinLesAnglais,in2015,andthereisstillalarge,unservedmarketinthecountry.ThisneedforelectrificationandEarthSparkInternational’ssocialenterprisemodelmakesHaititheidealplaceforEarthSparkInternational’sworktohavethemostimpact.GiventhelowelectrificationrateinHaiti,EarthSparkInternationalhasworkedwithcommunitiestounderstandtheirenergyneedsandshowhowsolarPVcanbeareliable,inexpensive,andsustainablewaytosupportthat.TheyhadtoinnovatetobeabletoprovethatsolarPVminigridscouldallowthesameflexibilityasbuyingkerosene,theydidthisbydevelopingsmartmetresthatallowedcustomerstotracktheirenergyconsumption.Toaccompanythis,EarthSparkalsocreatedapre-paysystemforcustomerstopurchasemoreelectricityastheywent.UltimatelythepopularityofthisflexiblesystemledtoEarthSparkInternationalcreatedaspin-offcompanycalledSparkMeter.Thesuccessoftheirinitialpilotproject,whichsuppliedelectricityto54customersbyusingtheexcesscapacityfromanearbytelecomtowertheywereabletosecurefundingfromUSAIDtoexpandtheminigridto430householdsandbusinessesandinstall90kWofPVcapacityand400kWofbatterycapacity.ThismodelprovidedtheblueprintforEarthSparkInternational’ssecondminigridprojectinTiburon,a95kWsolar-dieselhybridminigridthatserves500homesandbusinesses,andwasswitchedonin2019.TheprojectreceivedgrantfundingfromtheOPECFundforInternationalDevelopment,USAID,thePan-AmericanDevelopmentfoundation,andtheOrganisationofAmericanStates.Theprojectalsoreceivednearly20,000EURofcrowdfunding.CurrentlyEarthSparkInternationalanditsspin-offHaitiansocialenterpriseEnèjiPwòpoperatebothgrids,providingclean,reliableandinexpensiveelectricitytoaround8000people.Buildingonthis,EarthSparkisnowworkingtowardsanadditional22microgridsoverthenextfiveyears.Anchoredbya9.9millionUSDcommitmentfromtheGreenClimateFund,EarthSparkispullingtogethergrant,debt,andequityfromfoundations,socialimpactandinstitutionalinvestorsalongsideconnectionsubsidiesfromtheGovernmentofHaiti’snewmicrogridprogrambackedbytheWorldBank.Thisprivatesectorprojectcompanyledbyanon-profitorganisationallowsforlong-termlow-costcapitaltocatalysemicrogriddeploymentwhilealsoexplicitlysupportingworkstreamsthatenhancetheimpactofthegrids.Overall,themicrogridswillprovidelife-changingenergyaccesstoover16,700householdsandsmallbusinesses(>83,000people)andenableothercriticalproductiveusesofenergyincludingagriculturalprocessing,telecommunications,andevenelectriccookingsolutions.Multi-solvingforenergypovertyandotheraspectsofsustainabledevelopmentbothbooststhemicrogridbusinessmodelandenablesrobust,transformativechangeforcommunitiesinHaiti,andbeyond.GlobalMarketOutlookForSolarPower2021-202555©EarthSparkInternational.EarthSparkInternational’s95kWsolararrayinTiburon,HaitibasksinCaribbeansunshine.2Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202556CASESTUDY5:SUNMOKSHAInnovative30kWSmartNanogridinruralOdisha,IndiaSunMokshapilotedtheirinnovativeSmartNanogridsolutionforruralelectrificationinChhotkeivillageinAngul,Odisha,India.Thecompanyinvestedyearstocloselyunderstandthechallengesofenergyaccessandhasdevelopedaholisticsolutionwitha‘systems’approachtoaddressthesechallenges.Innovativebusinessmodels,accesstofinance,closepartnershipswithgrassrootsorganizationsandcontinuousskilldevelopmentforscalableandsustainableoperationsandsocio-economicdevelopmentarekeysocialinterventions.Thebusinessmodelcreatesmicro-enterprisesinthevillagesinanMEZ(micro-enterprisezone)tonotonlymakethemself-sufficient,butalsotocreatelocaleconomicgrowthandmovethevillagersuptheeconomicvaluechain.Thevillagehasbeensuppliedwitha30kWsolar-poweredSmartNanogridtomeettheenergydemandsof140households,20streetlights,atemple,andthreecommunitycentresconsumingabout20kW.Therest10kWhasbeensetasidefordaytimeusebyirrigationpumpsandmicroenterprises,suchasstitching,rice-puffmachines,provisionstores,poultry,refrigerators,oilmill,welding,cold-rooms,etc.,toimproveagriculturaloutput,enablevalue-additiontoagriculture,andgenerateemployment.©SunMoksha.30kWsolar-poweredSmartNanogridinChhotkei,Angul,Odisha,India.GlobalMarketOutlookForSolarPower2021-202557CASESTUDY6:SUSTAINSOLARSupportedby:InnovativeAssetFinanceforScalableTurnkeyMiniGridsInresponsetotheglobaleconomicslow-downcausedbytheCOVID-19pandemic,SustainSolar,supportedbyGET.invest,haslaunchedinnovativeassetleasingandconstructionfinancetoolsprovidingcatalyticcapitaltominigriddevelopers.Thegoalistobea"forcemultiplier"throughtheseassetfinancesolutions,enablingfasterscalabilityofminigridportfoliosatlower"all-in"cost.Apilotphasetodeploythesecatalytictoolswithselectminigriddevelopersiscurrentlyunderway,withinitialresultsdueinlate2021.Encounteringminigridfinanceandprocurementchallenges,SustainSolarhasstructuredscalablefinancemodelsforshortandlong-termcontractstomatchdeveloperneeds.Themodelforthesehasbeenadaptedfromsimilarasset-basedfinancingmodelsusedinmatureindustriessuchasconstructionandmining,SustainSolar’snewfinancetoolshavebeendesignedtoaddresssomeofthebiggesthurdlesfacedbyminigriddevelopers,suchas:highupfrontcapex,oversizedidlecapacity,expensivecostoffinance,andslowfundingdeployment.Underthesefinancemodels,qualifiedminigridcompaniescannowcontractSustainSolargenerationunitsoverextendedpaymentterms,withminimalupfrontdeposit,enablingfastersiteconstructionandrevenuegrowth.SustainSolar’sassetfinanceapproachisaimedathelpingminigridcompaniesimprovebankabilitybystrengtheningprojectreturns,scalability,andenergyservicesforruralcommunitiesacrossSub-SaharanAfrica.Theshort-termconstructionfinancemodel,or“grantbridge,”providesSustainSolargenerationunitsforalowupfrontdeposit,atcompetitiveinterestratesover6–18-monthtenors.Itisaimedatsupportingprojectsthatareguaranteedtoreceivepost-constructionfundingawards,asinthecaseofresults-basedfinancing.Underthismodel,minigridcompaniescaneasilyprocure,andcommissionqualitypowersystemsrequiredforperformance-basedfunding.Thelong-termtoolistheassetleasingmodel,providingextendedpaymenttermsonSustainSolargenerationunitsover10-yearcontracts.Thismodelsignificantlyreducesdebtandequityneeds,loweringupfrontgenerationCAPEXcostby70%afterdeposit.Offeringscalablepowersystemsandfinancing,thisapproachenablesminigrid“right-sizing”withmodularexpandability,givingflexibilitytogrowalongsidecustomerdemand.2Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202558Commercial&IndustrialThecommercialandindustrial(C&I)off-gridmarketisarelativelyyoungoneand,unlikeSHSandminigridsystems,doesnotservebottom-of-the-pyramidcustomersinruralareas.Instead,C&Iprojectsaimtoprovidepowertocorporatessuchashotels,industry,shoppingcentres,smallandmediumsizedcoldstoragefacilities,telecomstowers,miningcompaniesandlargerSMEswiththecapitalavailabletopayfortheinstallationorwithstrongbalancesheetstoaccessfinancingfortheseprojects.However,thesegmentalsoextendstopublicbuildingssuchasuniversities,schools,andhospitals.ParticularlyinSub-SaharanAfrica,manyoftheseentitiessufferfromexpensiveandunreliablegridconnections,leadingthemtoinstallandrelyuponexpensivedieselgenerationtoanswertheirpowerneeds.Asprivateandpublicentitiesseektoimprovetheiremissionsprofileandbringdowncosts,theC&Isegmentoftheoff-gridmarketisexpectedtoboom.C&Irooftopprojectsoffercompetitivelypricedenergyservicesandrepresentverybankableinvestments.Therearetwopredominantbusinessmodelsforthissegment:lease-to-ownoraperpetualfee-for-serviceagreement.Underthelease-to-ownarrangement,companiesgraduallypayoffthecostoftheC&Iinstallationthroughthesavingstheymakeontheirenergybillsafterswitchingfromagridconnectionordieselgeneration.Oncethecostoftheinstallationhasbeenfullypaid,theinstitutionownsitoutright.Inaperpetualfee-for-servicemodel,thecostoftheenergyserviceprovidedisamortisedwiththesavingsonenergybillsasinthelease-to-ownmodel.However,ownershipoftheassetneverchangeshands.Theadvantageofthesemodelsisthatthetotalcostofassetsdoesnotappearonacompany’sbalancesheetimmediately,keepingtheirdebt-to-equityratioslowwhiletheybenefitfromalessexpensiveservice.Withtheoff-gridC&Isegmentstillbeingveryyoung,understandingofthesectorisnotwidespread.Thismeansthatbespokefinancingmethodsarestillintheearlystagesofdevelopment.Currently,thebulkoffinancingcomesfromspecialistinvestorsandDFIsthatarewillingtoaccepttherisksoftheseprojects.However,asthesectorgrows,itisexpectedthatlongertenorloansanddebtfinance,withlowerinterestrates,couldbeoffered,particularlyafterthebankabilityofoff-gridC&Iprojectshasbeenestablished.Giventhesmallersizeofoff-gridC&Iprojects(usuallybetween100kW–5MW),itislikelythattheywillbebundled,withfinancingbeingdedicatedtoportfoliosratherthanindividualprojects.GlobalMarketOutlookForSolarPower2021-202559CASESTUDY7:OFGENLIMITEDPoweringUAPOldMutual’sEquatoriaTowersoffice,Juba,SouthSudanwith338kWsolarPVsystemanda715kWTeslaStoragesolution.OFGENcommissioneda338kWsolarPVsystemwitha715kWTeslastoragesolutionforUAPOldMutual’sEquatoriaTowersofficeinSouthSudan,hometointernationalNGOs,SouthSudanesegovernmentagencies,commercialenterprisesandrestaurants.Thecountryhasoneofthelowestratesofelectrificationandenergyconsumptionintheworldandlacksanationalgrid.Despitebeinganoilproducingcountry,SouthSudanlacksrefiningcapacityandmustimportallitsrefinedfuelandpetroleumproducts.Thelargercitieshavedieselorheavy-fuelpoweredgridsormini-grids,invaryingdegreesofoperation.LocatedontheWhiteNile,SouthSudanhasconsiderablehydropowerpotential,butconflicthaspreventedtheconstructionofanyoftheplannedhydroprojectsoverthelastdecade.Thislackofelectrificationrepresentsamajorbarriertoeconomicgrowthashouseholdsandenterprisesremainconstrainedbythelackofaccesstoreliable,affordableenergy.Thisoff-gridC&IinstallationrepresentedawayforUAPOldMutualtobenefitfromenergysavings,generatedbyswitchingawayfromexpensivedieselpower,whileboostingtheirenvironmentalsustainability.Themainchallengesfacingtheprojectincludedalengthyconstructionperiodbecauseofdelaysindeliveryofequipmenttosite,harshweatherconditionsonsiteandCOVIDrestrictions.TheotherchallengewasattractingappropriateprojectfinancingduetothepoliticalandeconomicinstabilityinSouthSudan.OFGEN’sregionalexpertiseandreputationasatrustworthyandeffectivecompanyplayedintheirfavorinovercomingthesechallenges.OFGENinvestedinthepowerplant,whichprovideselectricityatalowertariffratecomparedtotheexistingdieselgeneratorpower.TheelectricityissoldunderapowerpurchaseagreementwithUAPOldMutualpayingonlyforwhattheyuse,ensuringimmediatesavings.Currently,thePPAisrunonafeeforservicemodel.However,UAPOldMutualcanexercisetherightbuyoutthesystem,shouldtheychoose.TheprojectwasfinancedprimarilythroughOFGEN’sownequityreservesandfundingcontributedbytheirshareholders.ItwasdifficulttoattractothersourcesoffundingbecauseoftheperceivedpoliticalinstabilityinSouthSudan.OFGENarecurrentlyseekingtorefinancetheprojecttoimproveprojectreturnsandfreeuptheirfundstofinancefutureprojectsofasimilarnature.SouthSudanholdsenormoussolarpowerpotential,andoff-gridsolarcanplayamajorroleinaddressingunmetenergydemand.Theprojectwasimplementedoverparkingbaystomaximiseuseofspaceandprovideshadingtovehicleswhilegeneratingclean,affordable,andreliablepowerfortheUAPOldMutualEquatoriaTower.Theprojecthasboostedthelocaleconomy,improvedpublicservices,andpreservedscarcenaturalresources,whilecontributingtoeffortstoaddressthechronicpovertyandunemploymentthatfuelsarmedgrouprecruitment.Italsosupportsmoresustainablenationaldevelopmentandreducesglobalemissions.1AccordingtoWorldBank(2017)data,SouthSudaneseaverageover44kWhofelectricitypercapitaperyear,thesecondlowestfigureafterHaiti.©OFGENThenewcarportoff-gridsystemforUAPOldMutualEquatoriaTowers,Juba,Sudan.2Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202560CASESTUDY8:GENIUSWATTER30kWSolarPVC&IsmartmanagementsystemforahydroponicgreenhouseTheAfricaHydroponicsMarketisgreatlyexpanding.Also,hydroponicsystemscansuccessfullymeetAfricanagriculturechallenges.Themainadvantagesofhydroponicsystemsovertraditionalgrowingmethodsinclude:amoreefficientuseofwaterandfertilizersandminimallanduse.Furthermore,Hydroponicsreducesincidencesofpestsanddiseasesthatarecommonwithconventionalsoilfarming.Suchmethodsneedaconstantflowofwaterandenergytoproduceit.GeniusWatteraimstomaketheseprojectsenergyself-sufficient,environmentallysustainableandeconomicallycompetitive.ForthisprojectGeniusWatterwasaskedtoprovideanautonomousandsustainableenergysystemthatwouldguarantee24/7electricalpower,with"smart"loadmanagementforareverseosmosisunitandpumps.GeniusWatterprovidedanoffgridsolarphotovoltaicsystemwithapeakpowerof30kW.Theautomatedenergymanagementsystemenablesthegeneratortorunonlyincaseofprolongedbadweatherconditions,thusguaranteeingtherequiredsolarenergyandwatertothehydroponicgreenhouse.Inthisway,theenergycostsarereducedbyover95%.BeforeGeniusWatter’sintervention,thestaffhadtomanuallyoperatetheentire(alreadyexisting)plant,madeof25pumpsandanosmosisunit,onsite.ThankstotheGeniusWattersystem,itispossibletoautomaticallymanagealltheelectricandhydraulicloadsthroughreal-timemonitoringofmorethan50parameterstoobtainperfectsynchronybetweensolarPVplant,pumps,osmosisandotherloads.Inaddition,tocopewiththehumid,salineanddustyenvironment,GeniusWaterprovidedanautomaticpanelcleaningsystem,dustproofstructuresandprotectionstopreservealltheelectrotechnicalcomponentsfromcorrosiveagents.Generally,GWhastwobusinessmodelsforthiskindofplant:1Plantsale+long-termO&M.2.Energyandwaterasaservice(GWbuildstheplant,withoutanyupfrontinvestmentbytheclientwhopurchaseswaterandenergyviaamonthlyfeeunderalong-termagreement)+long-termO&M.Forthisspecificproject,theclienthasoptedforthedirectpurchaseofthesolarphotovoltaicplant,theenergymanagementsystemandlong-termO&Mservice.Forthefutureexpansionoftheproject,aco-investmentisplannedthroughaspecial-purposevehicleinwhichGeniusWatterandotherinvestorsparticipate.Thisinnovativemanagementsolutionforenergyandwatersupplyplantsismainlyfinancedthroughprivatecapital.ItisparticularlyattractivetotheclientandtheinvestorsastherisksandinvestmentareverylowandGeniusWatter’sdirectinvolvementisseenasaguaranteeofreliability,long-termefficiency,ensuringsavings.Ourtechnologyensuresthathydroponicagriculturalcultivationinsemi-desertareashasaconstantsupplyofenergyandwateratminimalcostinanautomatedandremotelycontrollableway,thusmakingtheentireprojectresilient.GeniusWatterhastrainedandengagedlocaltechniciansbothfortheconstructionoftheplantanditsmaintenance.Theplannedexpansionoftheprojectwillcreateadditionalsustainablejobsandtechnicalexpertise,bringingprosperitytolocalpopulationsaswellasqualityagriculturalproducts.GlobalMarketOutlookForSolarPower2021-202561©GeniusWatterHydroponicFarminCapeVerde,poweredandmanagedthrougha30kWsolarC&Iinstallation.GET.invest–mobilisingrenewableenergyinvestmentsGET.investisaEuropeanprogrammewhichsupportsinvestmentsindecentralisedrenewableenergy,supportedbytheEuropeanUnion,Germany,Sweden,theNetherlands,andAustria.Theprogrammeworkswithprivatesectorbusinessesandprojectdevelopers,financiersandregulatorstobuildsustainableenergymarketsindevelopingcountries.Servicesincludemarketinformation,afundingdatabase,matchmakingeventsandaccess-to-financeadvisoryviatheGET.investFinanceCatalyst.MoreinformationaboutGET.investisavailableonthenewwebsite,includingmanyusefulresourcesfornavigatingthecomplexlandscapeoffundingsources,insightsintodifferentmarketsegmentsandtheopportunitytoapplyforadvisoryservicesfromtheGET.investFinanceCatalyst.Keyfeaturesofthenewwebsiteinclude:•Anup-to-datefundingdatabasefeaturing100+financinginstrumentsfordecentralisedrenewableenergyprojectsandbusinessesinsub-SaharanAfrica,coveringgrants,loansandequityproviders.•15newcountrybriefs,providingsuccinct,business-orienteddataandinsightstohelpguideinitialmarketentryresearch.•Aresourcecentercollectingpublications,podcastsandothermaterialsproducedwithGET.invest’spartners,includingSolarPowerEurope,providingaccesstoawealthofindustryknowledge.•Resultsandstoriesfromsupporting180+projectsandcompanieswithaccess-to-financeadvisory.Visitwww.get-invest.eutolearnmore.2Off-gridsolar/continuedGlobalMarketOutlookForSolarPower2021-202562StaubliisatrademarkofStäubliInternationalAG,registeredinSwitzerlandandothercountries.©Stäubli2021Photocredits:StäubliAttentiontoprecisionandreliability.Ineverydetail.Asapioneerandglobalmarketleaderforconnectors,StäubliElectricalConnectorshasamassedover25yearsofexperienceinthephotovoltaicsindustry.Todate,morethan385GWor50%ofthePVpowerworldwidehasbeensuccessfullyinstalledusingover2billionoriginalMC4connectors.Yourbankablepartnerwww.staubli-alternative-energies.comMorethan385GWsuccessfullyconnectedOriginalMC4ConnectorGlobalMarketOutlookForSolarPower2021-202563What'scoolinsolarTRENDSSolarasatechnologyisfullofsurprises.Whenaparticularsolarcomponentorapplicationisthoughttohavereacheditstechnicallimitations,oftensomenewapproachleadstoincreasedoptimisation.Withthatsaid,once-successfulsolartechnologiesdofadeawayastheycannolongerkeeponloweringcostsorsupportingimprovementsintheperformanceofaPVdevice.Thisisalsotrueformanypromisingproductrevolutions–forsome,ithassimplytakentoolongtodevelop,andoncemarketready,incumbenttechnologyhasdevelopedbeyondtheneedforthatapproach.Althoughsolarisalreadythelowestcostpowergenerationtechnologyinmanyapplicationsandlocations,thereisstillmuchroomforfurtherdevelopmentsinordertocontinuecuttingcoststomakethetechnologyevenmorecompetitiveandopentonewfrontiers.Forinstance,combingsolarwithbatterystorageonmassivescalesorproducingtheonlytruesustainablehydrogensolution,greenhydrogen,aretwoofmanyopportunitiesforfurtherinnovation.SolarPowerEuropehasexaminedthelatestsolartechnologydevelopmentsthatcanreduceoverallsystemcostandthusleadtoincreaseddeployment.WafersMono–closetomonopolyWiththesolarindustryfocusingonimprovingtheperformanceofPVdevices,monocrystallinesiliconhasbecomethematerialofchoiceforwafersoveritscastedvariantmulticrystallinesilicon(alsoreferredtoaspolycrystalline).Monocrystallinesilicon,whichhasfewerdefectsthanmulticrystallinethusenablingproductionofhighercellefficiencies,isdominatingthesolarmarketwithanestimatedmarketshareof80%today.Oncethedominantvariant,multicrystallinenowrepresentsonly20%ofthemarketandisexpectedtocompletelyfadeawayinthecomingyears.Inanycase,thescalewillswingfurthertowardsmonothisyear,asallnewsiliconingotcrystallisationcapacityexpansionsforingotandwaferingfabshavebeenfocusingonthemonovariant.Forexample,theworld’slargestintegratedsolarmodulemanufacturerLONGiGroup,whichisalsothelargestwafermakertodayandhasbeentheprimaryadvocateofmonocrystallinewafers,hasbeenquicklyexecutingonitsambitiouswafercapacityexpansionplans.Afterreaching85GWinstalledcapacitybyendof2020,LONGiGroupalonenowtargets105GWbytheendof2021,over76%oflastyear’snewlyinstalledsolarcapacity.ThePVindustry’sincreasedfocusonhighefficiencycrystallinesiliconcelltechnologieshasledtoyetanothermonocrystallinewafervariant:the‘n-type’,ornegativelydopedproducts.Thesewafersareoppositelydopedthantoday’sstandardp-typesubstratesandarethepreferredchoiceforhighefficiencycrystallinecelltechnologies,suchasinterdigitatedbackcontactcells(IBC),heterojunction(HJT)andpassivatedcontacts,oftenreferredas‘TOPCon’.Withafewcompaniesnowinvolumeproductionoftheseadvancedcellarchitectures,n-typewafersgainedlessthan10%marketsharein2020,butisexpectedtoincreasestronglyinthecomingyears–toaround50%inadecade,accordingtoITRPV.©OxfordPVLargerandlargerwafersEmployinglargerwafershasbeenalowhangingfruitinaugmentingmodulepower,withoutchangingtoawholenewcelltechnology.Sincemodulepowerisafunctionofsize,adaptinglargersiliconsubstratesboostsmodulespoweraccordingly.Atthesametime–unlikefordesigninglargermoduleswithahighernumberofcells–thekeybenefitforlargerwafer-basedmodulesisthatpowerimprovementdoesnotrequireincreasingthevoltage,therebyloweringthebalanceofsystem(BOS)costsinasolarsystem;inotherwords,buildinghighpowermodulesusinglargerwafersisaneffectivetoreducethePVsystemcosts.Thebenefitshavebeensocompellingthattheentiresolarprocess,manufacturingandsupplychain,hasbeenadaptedtofacilitatethedeploymentofverylargewafer-basedPVproducts.Whilesolarcellmanufacturerswereusingmoreorlessonemainstreamwafersizeformanyyears,‘M0wafers’(6inchor156x156mmsidelength),asof2017anewformattookover:M2(156.75x156.75mm).In2018,thefirstcompaniesintroducedG1,afullsquare158.75mmformat.ThesameingotusedforproducingG1canalsobeusedformakingM6waferswithalargerareaandsidelengthof166mm,butinapseudo-squareformat,resultinginabettercost-performanceratio.Startingin2019,andforashortperiodoftime,itappearedthatM6wasthelargestwafersizeandwouldremainso.Butoveratimespanofmerelyafewmonths,afullsquareformatwith210mmsidelengthcalledG12wasintroduced,whichistoday’slargestcommerciallyavailablewafersize.Modulesbasedonthe210mmwaferformatsstartedappearingattheendof2019.Asanalternative,M10wasintroduced,182mmsidelengthandpseudo-squareformatthatwasintroducedin2020.Inconsequence,lastyear’smarketwasfloodedwithmultiplewafersizes.However,aslargenewcellcapacitieshavebeenbuiltandbroughtonlineveryrecently,mostofthenewfactoriesweredesignedtohandletheselargersubstrates.Whilebasicallyalllargecellmanufacturershavestartedusingthetwolargestwaferformats–andbothtogetherareexpectedtotakeamajormarketsharealreadyin2022-itremainstobeseenwhichwillbethemoresuccessfulformat,M10orG12.WhilethelargestverticallyintegratedcompaniesarepromotingM10asthenon-plusultra-format(alsoforthereasonthattheirolderwafercapacitiescouldnotproducelargersizes),thetopcellandmoduleproducerswithoutanywafercapacitiesaremostlyfavouringtheG12path.TRENDSWhat'scoolinsolar/continuedGlobalMarketOutlookForSolarPower2021-202564©TrinaSolarCellsPERC–theworkhorseWithbasicallyalltherecentgiganticsolarcellmanufacturingcapacitiesbasedonPassivatedEmitterRearContact(PERC),thiscellarchitecturehasbecomethestate-of-the-artcelltechnology.AconsiderablepricedropforPERCproductionequipmentpavedthewayformulti-GWscaleexpansioninChina.PERChasprogressedatarapidpaceintermsofefficiencyimprovementofgreaterthan0.5%absoluteperyear.Whilethepacehassloweddown,severalmanufactureshavealreadyexceeded23%efficiencyincommercialproductionofPERCcells.WithPERCtechnologybeingflexibletowardsproductionusinglargerwafers,ithasfurtherstrengtheneditsposition.Anotherbonusisitsbifaciality,asitisverysimpletotweakPERCintoacellthatproducespoweronbothsideswithoutanyadditionalcosts.Withthatsaid,thebifacialityofthistechnologyisonthelowersideofcrystallinesolarcellvarieties.AnotherinterestingdevelopmentthatisrelevantforPERCisgalliumdopingtechnology.Ingotsformonocrystallinewafersarehistoricallymostlypositivelydoped(p-type)withboron,whichistherootcauseforadegradationmechanism,lightinduceddegradation(LID).Negativelydopedwafers(n-type)donotsufferfromthisissue.Employinggalliuminsteadofboronliberatesp-typefromthisinherentdisadvantage,whichhasstartedtobeusedmorefrequently.TodayPERChaseverything:awell-establishedsupplychain,highthroughput,efficientproductionequipment,andcompatibleprocessconsumables.Thetechnologyisatitspeakintermsofprocessoptimisation,providingthebestcostperformanceratiotoday.ButPERCisexpectedtohititslimits;thereisnoclearpathwaytoimprovetheefficiencybeyondthecurrentlevelofalittleover23%inindustrialproductionenvironment.WhilerecordPERCcellefficienciesreacharound24%,theseproductionpracticesarenotcosteffectiveformassproduction;atleastnotyet.Nowthebigquestionis:Whatcomesnexttobringcellefficienciestoahigherlevel?PassivatedContacts–aprominentupgradeThenextevolutionarystepinsolarcelltechnologyfollowingPERCislikelytobePassivatedContactcells,oftenreferredtoasTOPCon(apassivatedcontactstechnologydevelopedatGermany’sFraunhoferISE),whereasophisticatedpassivationschemeisadaptedtoadvancecellarchitectureswithanaimtoreducerecombinationintheelectricalcontactregion.ImplementingTOPConrequiresonlyafewadditionalprocessingtoolsoverPERC.Theoreticallyspeaking,TOPConshowsthehighestultimateefficiencypotentialofallc-Sicellsat28.75%.ButinpracticeresearchinstituteISFHhasattainedarecordlevelperformanceof26.1%bycombiningitsproprietaryGlobalMarketOutlookForSolarPower2021-202565©TrinaSolarPOLOstructurewithabackcontactarchitectureonap-typebasewaferinlabscale.Intheindustrialenvironment,therehasbeenatightraceforrecordefficienciesinrecenttimes.InJune2021,JinkoSolarannounceda25.25%worldrecordefficiencyforcommercial-sizecells.Whenitcomestoindustrialimplementation,thetechnologyhasonlyahandfuloffollowerssofar,astherewereissueswithcertainproductionequipment.Now,notonlyworkaroundsandnewtoolshavebeendevelopedtoovercomethoselimitations,themachinesarealsocapableofprocessinglargerwafers.Withthesedevelopmentsinplace,TOPConisseeingnewtraction.Attheworld’slargestsolartradefairSNEC2021,severalleadingcellandmodulemakersunveiledTOPConproducts.Thepioneerinthisfield,Jolywood,hasrecentlydevelopedasecondgenerationofTOPContechnologythathasreachedanaveragecellefficiencyof24.09%initspilotlines.Heterojunction–HighinEfficiencyHeterojunctiontechnology(HJT)hasdemonstratedthehighestcrystallinesiliconcellefficiencysofar–itholdstheoverallcellrecordforsiliconsolarcellsat26.3%,basedonacombinationofHJTandIBC.WhenitcomestothepureHJTstructure,thehighestefficienciesforcommercialsizeswerereportedthisJune/JulybyChina’sLONGiandHuasun,bothat25.3%.TherehasbeensignificantinterestexpressedtoventureintoHJT,totallingtoabout50GWgloballyduring2020,buttheactualproductioncapacitiesaremuchlower,withoutputatthesingle-digitscale.ProbablythemostimportantrecentdevelopmentinthecontextofHJTcommercializationisformerPVequipmentmanufacturerMeyerBurger’sdecisiontobecomeacellandmodulemanufactureritselfandstopsellingitsHJTtechnology.InMay2021,itstartedproductionofcellsandmodulesinGermany,eachwith400MWcapacity,andhasalreadyannouncedexpansionto1.4GWin2022and7GWby2027.ThiscomesafteritsolditstechnologytoREC,whichwasthefirstcompanyafterPanasonicthatsuccessfullycommercializedHJTcell/modulesinvolumemanufacturinginSingapore,aswellastoENELGreenPowerinItalyandEcosoliferinHungary.AnotherEuropeanpureHJTplayerisHevelSolarfromRussia,whichoperatesa340MWcell/modulefactorybasedonitsowncelltechnology,whileafewChinesecompaniesareworkingonHJTaswell.HJThasseveraladvantagesovertraditionalcrystallinesolarcells,showingaleadinglowtemperaturecoefficient,thehighestbifacialityofallcelltechnologiesandmuchlessproductionsteps,butitrequiresinvestmentinacompletelynewlineandthecapexisconsiderablyhigherthanforbaselinePERC.However,withseveralAsiantoolvendorsventuringintothedevelopmentofdepositionequipmentforHJT,thecapexhasalreadybeencomingdown.Tandem–generationnextThewayimprovementsincellefficienciesareprogressing,notonlyPERCbutsinglejunctioncrystallinecellefficienciesasawholewillreachtheirpracticalefficiencylimitssoon.ConsideringthatHJT’sbestcommercialcellsareproducedat24.5%today,thepracticallimitofaround26%willbereachedinafewyears.Atthattime,theindustrymustbereadywithnextgenerationmulti-junctiontechnology,wheredifferentmaterialsarestackedtoharvestalargerpartofthelightspectrum.Therearemanydifferentoptionsforchoosingmaterialsandcombinations.Asitlookstoday,themostpromisingcandidateseemstobeac-Si/Perovskitetandemcellstructure,forwhichOxfordPVdemonstratedthelatestefficiencyworld-recordefficiencyof29.52%attheendof2020,anticipatingapracticalefficiencypotentialofaround35%.OxfordPViscurrentlysettingupitsfirstcommercial125MWmanufacturingunitforc-Si/perovskitetandemcellsinGermany,targetingfirstsalesin2022.ModulesBifacial–powerproductiononbothsidesBifacialsolarmodules,whichgeneratepoweronthefrontandback,isthetechnologythathelpsbringdownLCOEsofsolarpowerplantsthemostintheshort-run.Thisresultsinpowergainsbetween5%andupto30%,dependingonthesolarcelltechnologyused,location,andsystemdesign.TransformingPERCintobifacialdoesnotcostanythingextra.Indeed,today’snewhigh-efficiencycelltechnologiesHJTandTOPConareboth‘naturally’bifacial.Bifacialtechnologycomeswithyetanotheradvantageofextendedpowerwarrantyof30years.Thesupplychaintosupportthechangesrequiredatmodulelevelisfullyevolved–regardingthechangeofTRENDSWhat'scoolinsolar/continuedGlobalMarketOutlookForSolarPower2021-202566encapsulation,transparentrearcover,oroptimisedjunctionboxdesigns.Withmoreandmorebifacialinstallationspoppinguparoundtheworld,real-timedatashowingthebenefitsofbifacialsystemsisavailable,andthetechnologyisnowfullybankable.Researchersaroundtheworldhavebeenworkingondevelopingsimulationprogramstopredictbifacialefficiency.Traditionally,bifacialproductssufferedfromalackofstandardsformeasuringIVmeasurementofthePVdevicesandrespectiveratings.WithIECTS60904-1-2:2019comingintoeffectin2019,thisambiguityhasbeensuccessfullyaddressed.Thecurrentstandardallowsfortestingabifacialsubstratefromasinglesideaswellaswithdouble-sideilluminationwithclearguidelinestospecifythebifacialgains.CelltestersandsunsimulatorsfromleadingsuppliersarealsonowavailabletotestbifacialPVcellsandmodules.Alloftheserecentdevelopmentshaveenabledthetechnologytoquicklygaininmarketshare–fromcloseto15%in2019to20%in2020–andcontinueonthispath.TheInternationalRoadmapforPhotovoltaic2021(ITRPV),expectsbifacialmodulestoreachamarketshareof30%alreadythisyearand55%by2031.Slicingcells–increasinglyinevitableItsoundscounterintuitivebutslicingafully-processedsolarcellintotwopieces(inthecaseofhalf-cells)hashugebenefits.Ahalf-celldesignreducesresistancelossesandisthusasimplebutveryeffectivemeansofincreasingmodulepower.Apowerboostofabout5–6Wonthemodulelevelcanbegainedfromahalf-celldesign.Althoughthehalf-cellapproachreducesthethroughputofstringingtoolsby50%andrequiresadditionallasercuttingtools,withinterconnectiontoolsandlaserscribersbecomingverycheap,half-cellhasemergedasastandardinstate-of-the-artmodulefabs.Severalmodulemakershavecompletelyconvertedtheirmoduleproductiontoahalf-celllayoutandothersareexpectedtofollowsuit.Withthetrendtoverylargewafersizes,asolarcell’scurrentisrisingaccordingly,therebyaugmentingitslosses.Ifsuchlosseswanttobeavoided,slicingofcellswillbecomeinevitable.Anindustry-widepracticetoslicecellsgenerallystartsfromM6formatandisappliedtoalllargerformats.AfewmodulesuppliersofferingproductsbasedonG12cellsizesevenoffer1/3cells,whichmeansthecellisslicedinto3pieces.Thehalf-celltermmightjustbecomeafigurativetermasPVproducersareevaluatingslicingacellinto4pieces.GlobalMarketOutlookForSolarPower2021-202567©JinkoSolarMulti-busbars,multiplebenefitsThemultibusbar(MBB)approachinprincipleisanextrapolationofthe‘morebusbars’concept.Here,ahighernumberofwires(currentlyfrom9to12)isusedinsteadofflatsolarribbonstoelectricallyconnectthesolarcellsinamodule.Theadvantagesaremany:reducingresistancelosses,loweringcurrentdensitycarriedbyeachbusbar,betteropticalpropertiesenabledbytheroundshapeoftheinterconnection,andhighertolerancetocracksincells.EmployingMBBmakesbusbarssoclosetoeachotherthatthefingerwidthcanbereducedsignificantly,therebyreducingthesilverpasteconsumption.Whilethecurrentpracticeistousestillbusbars,MBBinprinciplealsoenablesreplacingthebusbarswithsmallsolderingpads,whichpavestheroadtofurtherreductioninsilverpasteconsumption.TheshifttowardsMBBhasbecomemuchmoreapparentwiththeindustry’smovetowardslargerwaferformats.Reflectiveribbons–gainingfromreflectionWhileusingcircularcopperwiresishelpfulinreducingtheopticalshadingfootprintoftheinterconnect,employingreflectiveinterconnectsmayevenaddtoopticalgain.Thefundamentalprincipleissimple.Makingtheinterconnectsurfacereflectivereflectsthelightbackontotheactivemodulearea.WhilesomeEuropeanribbonsmanufacturers,includingUlbrich(lightcapturingribbon)andSchlenk(lightharvestingstring)havecommercializedsuchribbonsinthepast,LONGirecentlystartedemployingitsproprietarytriangularsegmentedribboninitslatestmodulerangeusingM10wafers.Narrowornogap–eliminatingdeadareasIncreasedwaferandmodulesizecallsforbetterutilizationofthemodulearea.Packingsolarcellsasdenselyaspossiblemakessensetoreducethemoduleareatothemaximumpossibleextent,andthuspositivelyimpactmoduleefficiency.Shinglingisoneapproachthateliminatesthespacingbetweenthecellsinasolarmodulecompletely,providingthemodulewithastunningopticalappearance.Inadditiontoaesthetics,theapproachalsoenhancesthemodulepower.Shinglingisnothingbutslicingthefullyprocessedcellinto5or6stripsthatareinterconnectedbyoverlappingattheedges,likerooftiles.However,thetechnologyismostlyprotectedbypatentsownedbySunPowerandSolaria.ThisiswhyTRENDSWhat'scoolinsolar/continuedGlobalMarketOutlookForSolarPower2021-202568©LONGiSolarcompaniesstartedlookingforworkarounds.TilingRibbon(TR)isonesuchapproachcommercialisedbyJinkoSolar.Inthisalternateapproach,aroundribbon,similartotheoneusedintheMBBapproach,ispressedflatexactlywhereitwouldbendinordertoconnectthetopofthenextcell.Insteadofplacingthecellsside-by-side,thecellsslightlyoverlap.Thetechnologyisverysimilartoshinglingasfarasoverlappingisconcerned,butitusesaninterconnectionmediaandatthesametimeavoidslaserstrippingofcellsintoseveralpieces,eventhoughJinkoSolaruseshalf-cells.Ifnoteliminatingtheinter-cellspacingcompletely,themajorityofthemodulemakersaretryingtoreduceit.TheapproachcloselyfollowsonthefootprintsofTilingRibbontechnologyuptothelevelofinterconnectsthatarepressedflatbetweenthecells.However,insteadofoverlappingthecells,thegapisjustnarrowedconsiderably.Whilethetraditionalcelllayoutmaintainsacellgapof2mm,thelatestmoduleproductsofseveralleadingmodulecompaniesreducethisgaptobetween0.5–0.7mm.PowergoinghigherandhigherOneofthemostimportanttrendsintoday’sPVworldisrealisinghighermodulepowerusinglargerwafers.Whilebuildingmoduleswith500Wwasanimportanttrendaboutayearago,todayseveralleadingPVmanufacturershavestartedmassproducingclosetooralready600W+panelsonamulti-GWscale.AttheSNECshowinShanghaiinJune,afewcompaniesevenshowcasedmoduleswith700Wpowerratings.Inadditiontoemployinglargerwafers,modulemakersarealsoimplementingablendofadvancedtechnologiesinasingleproducttoincreaseoutput,suchasbifacialdesign,cutcells,MBBandnarrowedcellgaps,ornogaps.Atthesametime,modulecompaniesareincreasinglyincludingintheirproductportfoliosthenewbreedofmodulesindownsizedversionsforrooftopapplications.Whilealsoemployingverylargeandhalforthirdcutcells,thecellnumberintheseproductsisreducedtoenableproductionofsmallerpanelformatsthathavestillhighpowerratingsofaround400Wbutcanbeliftedbycraftsmen,liketheearlierrooftopmodulegeneration.Withtheadventoflargerwafers,thevarietyinmoduleconfigurationswithdifferentcellcountshasincreasedto78,72,66,60,54andeven40,ortobeprecise,theequivalent(ifa72-cellconfigurationiscutinhalf,themodulehas144cells,forexample).GlobalMarketOutlookForSolarPower2021-202569©LONGiSolarGlass-glassmodulesTherapidexpansionofbifacialmoduleswasthemaincauseforashortageofsolarglassformodulesin2020.Asbifacialmodulesneedtwotransparentcovers–andtheproductofchoiceismostlyglass,demandforsolarglassfrommodulemanufacturersincreasedsignificantlylastyear.AccordingtoITRPV2021,moduleswithglasscoveringboththefrontandrearhadamarketshareofaround18%in2020andareexpectedtoconstantlyexpandovertheyearstoreacha55%marketsharein2031.ThinandlargeThin-filmtechnologyinsolarismostlyrepresentedbyCdTetechnology,producedprimarilybyUScompanyFirstSolaratatotalproductioncapacityofaround7.9GW.ThecompanyintroduceditslatestSeries6in2019–aproductwithalargeformfactorandupto460W,asuperiortemperaturecoefficient,betterspectralresponse,atruetrackingadvantageasshadinghaslessimpactonthin-filmmodules,andreducedsoiling,whichresultsinhighenergyyieldsandlowLCOEs.InJune2021,FirstSolarannounceditsplantoincreaseitsproductioncapacityby3.3GWviaathirdfactoryintheUS.InvertersBig,small,andverysmallTheimportanceoftheinverter’sroleinPVsystemshasonlybeenincreasingwiththearrivalofdigitalisationinthesolarsector.PrimarilyusedinthepastasameansofconvertingDCintoACpower,today,invertersarethetruebrainsofsolarsystems.Theycopewithallvarietiesofstoragesystems,areakeytoolforefficientsolarpowerplantoperation&management,alsoregardinggridservices,andareapartnerofintelligentenergymanagementsystemsinhomesorthesolarmobilityworld.Regardingsize,ontheonehand,invertersaregettingbigger,withcentralinvertersnowavailableover5MWtoaddresstheneedsofultra-largeutility-scaleplants.Atthesametime,producersofstringinvertersareofferingincreasinglyhigherpowersolutionsaswell.Whilethemaximumpowerratingwasaround250MWayearago,thelargestproductsarenowreachingupto325MWtocompeteinthefieldoflarge-scalepowerplants.Animportantdevelopmentforstringinvertersisitscompatibilitywiththenewmodulegenerationfeaturingverylargecells,whichhavedifferentneedsregardingcurrentandvoltage.ThetypicalincreaseincurrentwithlargerwaferssuchasM6,M10andG12is9%,28%75%,respectively,comparedtotheearlier156mmwafer‘standard’.Theearliergenerationofinverterswithalimitforthemaximumcurrentat13AwereonlycompatibleuptoM10modules,butnotverywellwithG12modules.NownearlyeveryleadinginvertersupplierhasahighcurrentvariantthatcanmanagedifferentconfigurationsofG12modules.Thereisalsothepopularconceptofcommercial-sizeinverterswithpoweroptimiserstooperateasolarsystemmoreefficiently,whichhasfoundnewproponents;whilemodule-integratedmicro-invertersarealsoseeingincreasedtractionasbifacialmodulesandagrowingrooftopmarketwithafocusonsafetyprovidethegroundsforastrongergrowthofmodule-levelpowerelectronics.Probablythemostvisibletrendintheresidentialrooftopsegmentisthehybridinverterforsolar&storagesystems,whichbasicallyeveryinvertermanufacturerhasaddedtoitsproductportfolio.MountingsystemsAlwaysfacingthesunToday’slargeutility-scalesolarpowerplantshavebecomeastandardforutility-scalePVplantsinsouthernregionsbutareincreasinglyusedinlesssunnierareas.Theyoperatereliablyand,dependingonthelocation,theinvestmentoverfixedmountingsystemsismorethancompensatedbylowerLCOEs.Thesecondlatesttrackergenerationwasdesignedtobeabletoincludebifacialmodules,sothattheyhaveopenaccesstothegrounds,inordertobeabletogeneratepowerunhinderedontheirback-side.Infact,themarriageofbifacialwithtrackersresultsinasynergisticeffect:thebenefitofcombiningboththetechnologiesismorethanthesumoftheindividualbenefits.Thelatestproductupdatesaddresstheneedsofthenewhigh-powermoduletypeswithpowerratingsof600W+.Theseverylargemoduleformatsrequiremuchsturdiertrackingsystemstoresiststrongerwindloads.TRENDSWhat'scoolinsolar/continuedGlobalMarketOutlookForSolarPower2021-202570SolarsystemsandinnovativeapplicationsFloatingSolarArapidlygrowingapplicationforPVistomakeuseofwaterasaninstallationsiteinsteadofland.ThisapproachiscalledfloatingPV(FPV)–thesystemsetupissomewhatlikegroundmounts,exceptforthefactthatallpanels,andoftentheinverter,arefixedonafloatingplatformwithananchoringsystem.Theapproachcostssomewhatmoretobuildbuthasseveraladvantages:itsavesonlandforPVinstallation,andisespeciallybeneficialforlocationswherelandisscarce.Thebenefitsareevenmoreapparentwhencombinedoncommercially-usedwatersitesfordrinkingwater,fishing,hydropowergenerationsites–thefloatingsystemshelptoreducewaterevaporationandimprovewaterquality,andinthecaseofhydropowerplants,canevenusethetransmissioninfrastructure.Thesetupalsopromiseshigherpoweryieldscomparedtoground-mountedsystemsduetothecoolingeffectfromthewaterunderneath.Accordingtoa2018reportfromtheWorldBank,evenunderconservativeassumptions,floatingPVcangrowupto400GWifonly1%ofthepotentialareaisused.Indeed,FPVsystemsarebeginningtosproutacrosstheglobe,withthemostimpressivebeingagigantic2.1GWprojectinSouthKorea.TheWorldBankhasalsopublishedaFloatingSolarHandbookforPractitioners,tosetupbestpracticesinFPVdeploymentandofferpracticalguidelines.Buildingonthis,technicaladvisoryDNV,whichexpectsaFPVpipelineofover10GWby2025,hasreleased,togetherwithanindustryconsortium,detailedpracticalrecommendationsforFPVprojectdevelopment,focusingon5keytopics,namelysiteconditionsassessment,energyyieldforecast,mooringandanchoringsystems,floatingstructures,permitting,andenvironmentalimpact.Solar&batterystorage–aperfectmatchStationarybatterystorageisquicklygaininginpopularityinanincreasingnumberofsolarmarkets;inparticular,inestablishedresidentialPVrooftopmarkets,wherethetechnologyalreadysupportsthedisseminationofsolarself-consumptionsystems,andsoonwillbecrucialtobringsolarpenetrationtothenextlevel.InGermany,around106,000residentialstoragesystemswereinstalledin2020,whichisanincreaseof63%ascomparedtothe65,000residentialstoragesystemsinstalledin2019.Insum,theamountofsystemsinstalledin2020equalaround740MW,whichmakesGermanybyfarthelargeststoragemarketinEurope.WithintheresidentialGlobalMarketOutlookForSolarPower2021-202571©LightsourceBP©Amarencosegmentbetween7and10kW,threeoutoffournewPVsystemsinGermanywereinstalledincombinationwithastoragesolutionin2020.For2021EUPDResearchforecasts150,000newresidentialstoragesystemstobeinstalledintheGermanmarket.SustainablesolarforfarmersAnystrategytoutilisethespacerequiredforasolarinstallationmoreefficientlyisalwayswelcomedbythesector.Agro-photovoltaics,orAgri-PV,isafairlynewmountingtechnologyandmethod,whichenablestheuseofagriculturallandforbothfoodproductionandsolarpowergenerationatthesametime.LikeFloatingPV,Agri-PVcostsmoreinthebeginning,asthemountingstructuresaremuchmoresophisticated,butoffersmanybenefits.Inadditiontoincreasingtheresourceefficiencythankstodual-landuse,Agri-PValsoenablesfarmerstodiversifytheirincome,thushelpingtoworkagainsttheruralpopulationexodus.Forfarmers,itactuallymeansatriple-win,astheshadingofthePVsystemenableshighercropyields,lowerwateruse,andcleanenergygeneration.GreenHydrogen–madewithrenewables,theonlyacceptablesolutionRegions,countriesandaquicklygrowingnumberofcompaniesaroundtheworldhavediscoveredhydrogenasthenextverybigthingfortheenergytransition.Butduetoitscomparativelylowefficiencyitmakessensetoprioritizedirect&lowestcostelectrificationwheneverpossible,e.g.,replacingICEcarsbyelectricvehicles.Yet,hydrogenfordecarbonisationoftheso-called‘hard-to-abate’sectorsheavyindustry(cement,steel,chemical),heavy-dutytransport(shipping,aviation)istheappropriatesolution-ifgeneratedwithrenewableenergy.MultipleGWofrenewablehydrogenfacilitieshavebeenannouncedinrecentmonths,inparticularinAustralia,MEA,andtheEuropeanUnion,whichhassetanambitiousgreenhydrogentargetofatleast40GWby2030.Probablyagoodexamplefortoday’shydrogenhypeisaJune2021announcementaboutplansfora30GWhydrogenfacilitybasedon45GWsolar&windinKazakhstan,acountrywithalittlemorethan1GWofsolarinstalledsofar.TRENDSWhat'scoolinsolar/continuedGlobalMarketOutlookForSolarPower2021-202572GlobalMarketOutlookForSolarPower2021-202573COVID-19impactsonsolarHIGHLIGHTProspectsforsolarpowershinebrighterasindustry’sexpansionacceleratesevenduringtheCOVID-19pandemic.Resilienceandhistorically-lowcostsmakesolarPVthenew“newking”ofelectricitymarketsbutthereisamplescopetoimprovepolicysupport.Thesolarsectorwasimpactedhardin2020duetotheCOVID-19pandemic,withcompaniesexperiencingseveredisruptionintheirday-to-dayoperationsandsupplychains,yetitdemonstratedimpressiveresiliencenonetheless,emergingattheendasoneofthefewbrightspotsintheglobaleconomy.Oneyearlater,asvaccinesandstimuluspackagesarephasedinglobally,theprospectsfortheglobalsolarPVindustryhavegrownbrighterasindustrysentimentimprovesandpolicymakersinvariousregionsendorseinvestmentsandconcretemeasurestosupportdramaticgrowthinrenewableenergy.TheupbeatoutlookemergedclearlyinasurveyinQ2/2021carriedoutbytheGlobalSolarCouncilwhichheardfromitsmembers–comprisedofnationalandregionalsolarassociations–aswellassolarbusinessleadersaroundtheworld.Theengagementinitiativewasaimedatproducingasnapshotofthesector’scurrenthealthandgatheringinsightsintopossiblepost-pandemicscenariosforthesolarmarkettoultimatelyunderstandtheopportunitiesandbarrierstosolardevelopmentatthisveryimportantstagefortheenergytransition.Thesurveyshowedanimprovingoutlookforsolarbusiness,with81%ofrespondentsexpectinggrowthinsalesin2021comparedto72%whoreportedapositiveexpansionin2020.Theimprovingpicturewasunderscoredbyrespondents’assessmentofhowgovernmentsaresupportingsolarPVintermsofpost-pandemicplansandgreenrecoverypoliciescomparedtothesupportprovidedinthemidstofthehealthemergencyin2020.Theoveralljudgementisnotoverwhelmingbecausethosewithanegativeopinionofgovernmentsupportandgreenrecoveryprevailed–butsentimentiscertainlyimproving,whichisimportant.Theproportionofrespondentsgivingapositiveorverypositiveratingtogovernmentactionishigherintermsofthepost-pandemicscenario,meaningthenetperception(positivesminusnegatives)dropstominus2.3%(seeFig.GSCSURVEYQUESTION1).©M2020HowtoacceleratesolargrowthWhatkindofsupportareindustryparticipantsexpectingfromgovernments?Tobesure,thereisabigfocusonbetterpermittingandsimplificationofauthorisationprocedures,improvedpowermarketaccessrules,betterfinancingconditionsandmechanisms,taxreductionsandincentivesforPVinvestmentandself-production.Overall,thereiscertainlyanexpectationthatthepolicyambitionneedstoberaisedinmanycountries,withamajorityofrespondentssayingrenewableenergyandPVtargetswerenothighenough.Indeed,18%saidtheirgovernmenthadnospecifictargetandanother46%statedthereneededtobea“significant”raisingofambitions(see.GSCSURVEYQUESTION2).COVID-19impactsonsolar/continuedGlobalMarketOutlookForSolarPower2021-202574SOURCE:GlobalSolarCouncil(2021).©SOLARPOWEREUROPE2021GSCSURVEYQUESTION1RATINGOFHOWGOVERNMENTHASRESPONDEDTOTHENEWSCENARIONegative/VeryNegativePerceptionofpost-pandemicsupportforPVPositive/VeryPositiveNegative/VeryNegativePerceptionofemergencyCOVID-19supportforPVPositive/VeryPositive%0105152535203040Net-13.7%Net-2.3%SOURCE:GlobalSolarCouncil(2021).©SOLARPOWEREUROPE2021GSCSURVEYQUESTION2HOWDOYOUVIEWYOURGOVERNMENT’SOFFICIALTARGETSFORRENEWABLEENERGYANDPVINSTALLATIONS?(%OFRESPONSES)Therearenoformaltargets;18%Theambitionneedstoberaisedsignificantly;46%TheyareinlinewithParisAgreementclimategoals;25%Theyarealmostambitiousenough;11%GlobalSolarCouncilCovid-19SurveyTakeawaysforPolicyMakersAtapracticallevel,fivespecificactionsforpolicymakersemergedfromthesurveyinordertoimprovesolarbusinesses’performance:1.Supportself-sufficiencyforallbuildingsemployingrenewablespackagesintegratingPV,energystorage,electricvehicles,andenergymanagementsystemstostimulatedecentralisedself-generationandtacklethedecarbonisationchallengeasawhole;2.Increasethetransparencyofgridconnectionprocessesforlarge-scalePVprojects;3.Standardisetherulesforenvironmentallicensingproceduresforlarge-scalePVprojects;4.ReducethediscrepancyoffinancingconditionsbetweenregulatedandfreemarketPPAsforlarge-scalesolarPVprojects;5.ImprovetheregulationsonEnergyCommunities,allowingindustriestosharethebenefitsoftheself-consumptionoftheenergyandboostingthedevelopmentofdistributedgeneration.BusinesscontinuesdespiterestrictionsThepicturethatemergesfromoursurveyrespondentsissupportedbyevidencefromdifferentcountriesandregions.Infact,followingthewidespreadandnearsimultaneouslockdownsthatputtheglobaleconomyoniceinthefirsthalfof2020,thespreadofthepandemichasbeenmoreuneven,withsuccessivewavesaffectingdifferentregionsatdifferenttimesandrestrictionsbeinglesssevere.ThishasunderpinnedtheresilienceofPVsupplychainsandallowedcompaniestofindbusinesscontinuitystrategies,supportedbystrongunderlyingdemandgrowth.Inanycase,thepandemichasforcedeveryonetofindinnovativewaystokeepactivitygoing.OnerecentexamplecomesfromthedevastatingthirdwavethatstruckIndiainearly2021:theIndiangovernmentshiftedfromhavingasweepingnationalapproachtoCOVID-19restrictionstostate-baseddecisions.ThatmeantsomestateslikeGujaratonlyappliedapartiallockdown,allowingbusinessactivityandlogisticstheretocontinue.Still,Indiaasawholehasbeenaffectedheavilybythepandemic,whichcanbeheldresponsibleatleastforpartofitsdramaticdownturnin2020.TheCOVID-19pandemichasbroughtunexpectedshiftsinbehavioursandchoices,fromtheconsumerperspective,inbusinessaswellasfromapolicystandpoint.Theresidentialsolarsectorhasbeensustainedbythefactthatbeingforcedtostayathomeforlargeamountsoftimehasgivenpeoplemorereasonstopayattentiontotheirenergybillsandprovidedtimetopursuehomeimprovements,includingsolarinstallations.Bythesummerof2020,capacityofsub-10kWsolarsystemsinstalledinGermanyhadexceededthefigureforthewholeof2019,accordingtothecountry’senergyregulatorBundesnetzagentur.InAustralia,whereoneinfourhouseholdsalreadyhassolar,datafromtheCleanEnergyRegulatoranalysedbyCSIROshowedthatin2020arecord362,000rooftopsolarPVinstallationswereissuedwithsmall-scalerenewableenergyschemecertificates(STCs),anincreaseof28%from2019.Themajorityofinstallationsundertheschemewereresidential,withasmallernumberforcommercialandindustrialproperties.IntheUnitedStates,thecountrywiththehighestconfirmedfatalitynumberduetoCOVID-19sofar,householdshavebeenalsoturningtorooftopsolarforenergysavingsandresiliency.Thatmeantthatcitypermitofficesweresittingonlargebacklogsofrooftopsolarpermitsasnormaloperationsresumedinthesecondhalfof2020.Indeed,2020wasabanneryearfortheU.S.renewablesectorwithover19GWofnewsolarenergycapacityinstalled.Thiscamedespitethepandemicandfouryearsofunhelpfulfederalpoliciesandthankstoincreasedcost-effectiveness,strongconsumerdemand,andaggressivestaterenewableenergytargets.Butthemaindriverwasayear-enddeadlineforthe26%USsolarinvestmenttaxcredit(ITC),triggeringarecordalsoontheinvestmentside,with36billionUSDgoingintosolar,mostlyutilityscalePVplants.Infact,renewableenergywasAmerica’slargestsourceofprivatesectorinfrastructureinvestmentin2020.However,endofDecember2020,thesolarITC,instrumentalforU.S.solargrowthforoveradecade,hasbeenextendedbytwoyearsaspartof2.3trillionUSDfederalspendingandcoronareliefpackages.GlobalMarketOutlookForSolarPower2021-202575COVID-19impactsonsolar/continuedGlobalMarketOutlookForSolarPower2021-202576COVID-19hasalsochangedattitudestotheenvironmentandbroughtheightenedawarenessoftheneedtoacttopreventglobalrisks,frompandemicstoextremeweatherevents.Driveninpartbyarapidshiftinconsumerandemployeeexpectationsandtheneedtoraisetheirsustainabilityperformance,anincreasingnumberofcorporationshavestartedtoturntorenewablepowerpurchaseagreements(PPAs).ThetrendhasbeenmostevidentintheU.S.,whereBloombergNEFreported11.9GWofcorporatePPAannouncementsin2020alone.Inthesameyear,theEuropeanRE-Sourceplatformreportedarecord-breakingyearwithnearly4GWofPPAssignedacross12countries.TheEuropeanUnionhasrespondedtothepandemiccrisiswithits750millionEURNextGenerationEU(NGEU)programmetohelprepairtheimmediateeconomicdamages,whichalsoforeseesinvestmentsandreformsacceleratingtheecologicalanddigitaltransitionaswellasimprovingsocialconditions.Memberstateswhowanttotapthesefundsneedtoinvestabout30%intoprojectsthatcontributetothefightagainstclimatechange.Thankstoafirst-everEUcommondebtissue,theprogrammeallocatesmorethan200billionEURtoItaly,thedisbursementofwhichistiedtoapackageofinvestmentsandreforms:theEURecoveryandResiliencePlan,thecentrepieceoftheNGEU.AsthebiggestrecipientofEUfunds,Italyisausefulcaseforhowpost-COVIDrecoveryplanshavesoughttotakeagreenturn,directlyimpactingthesolarsector.AsreportedbyItaliaSolare,theplan–thoughnotyetimplemented–targetssolarPVinseveralways.Investmentsof1.5billionEURareplannedfortheinstallationofsolarPVontheroofsofbuildingsforproductiveuseintheagricultural,livestockandagro-industrialsectors,withaninstalledcapacityofapproximately430MW.Anadditional1.1billionEURisforeseenforthedevelopmentofagrivoltaics,withaninstalledcapacityofapproximately1.04GWofmediumandlargescalePVplants.SolarPVisalsosettobenefitfrompartof2.2billionEURallocatedtothepromotionofRESforenergycommunitiesandself-consumption,aswellasfrom680millionEURassignedtothepromotionofinnovativeplants(includingoff-shore).WithitsNationalEnergyandClimatePlan(NECP),Italytargetsabout30GWnewsolarPVby2030,butthisnumberneedstorisetomeetthenewambitiousEUemissionsreductiongoals.Despitethepandemic,Italyinstalled625MWofnewsolarPVin2020and174MWinQ12021,raisingthecumulativeinstalledcapacityto21.8GW.ThistrendistoolowcomparedwiththecurrentplanandisfarfromwhatItaliaSolareexpectswillbethatoftherevisedNECP.HencetheneedtosimplifyregulatoryandauthorisationprocessesandtoclarifythedevelopmentofsolarPVonagriculturalareas.Hereagain,smallscaleinstallationsmaycometotherescuethankstomeasureswhichhavenotyetexpressedtheirfullpotentialliketheSuperbonus,aresidentialsolarandstorage110%taxcreditcreatedtoboostpost-pandemicrecoverywhileimprovingtheenergyefficiencyintheresidentialsector,aswellasenergycommunitiesandcollectiveself-consumption,whichareexpectedtogenerateuptoadditional20GW.Thepandemic,therefore,wasnottheeconomicdisasterforthesolarPVindustrythatitmighthaveseemedbackinearly2020,thankstotheresilienceofsupplychains,strongunderlyingdemandatboththeresidentialandindustrialsectorsandafavourableturninpolicy.Thispositivesolaroutlookhasbeenreinforcedbyseveralindustryexpertsandinstitutionsontheinternationalstage,withfullagreementaboutsolarPVbeingkeyforacompleteeconomicrecoveryandessentialforachievingthemoreambitiousdecarbonisationtargetsofmanycountriesaroundtheworld.WithsolarPVnowbeingthecheapestsourceofelectricityinmostcountries,accordingtotheInternationalEnergyAgency(IEA),itissettotriplebefore2030undercurrentandproposedpolicies,withthepotentialforanevenfastergrowth.NowondertheIEAsaidduringthelaunchoftheWorldEnergyOutlook2020lastOctoberthatit‘seessolarbecomingthenewkingoftheworld’selectricitymarkets.’Authors:FrancescoLuise&JamesOsborne,GlobalSolarCouncilGlobalMarketOutlookForSolarPower2021-202577GW-scalemarkets4In2020,18countriesinstalledmorethan1GWofsolar;onemorecomparedtothe17GW-scalesolarmarketsin2019(seeFig.19).ThenegativeimpactsfromCOVID-19onsolardemandwerenotasbadasweforecastedlastyear,whenweexpectedthenumberofGW-scalemarketstodecrease.Basedonthismorepositiveoutlook,wealsoexpectgrowthtocontinuereaching20GW-scalemarketsin2021,23GW-scalemarketsin2022andatleast29GW-scalemarketsin2023.300MW,Cáceres,Extremadura,Spain.©StatkraftFIGURE22GW-SCALESOLARPVMARKETS2019-2021RestofWorld;23.1%RestofWorld;9%Netherlands;2.2%Netherlands;2%Poland;2%Taiwan;1.1%Taiwan;1%SouthAfrica;1%Mexico;1.1%Mexico;1%Spain;3.8%Vietnam;8%Ukraine;3.1%Ukraine;1%Japan;6%Brazil;1.7%Brazil;2%India;7.0%SouthKorea;2.5%SouthKorea;3%Germany;3.1%Germany;4%Japan;5.6%Vietnam;5.0%Australia;3.5%UnitedStates;12%UnitedStates;14%China;23.9%China;35%17GWMarkets18GWMarkets20192020UAE;1.0%Belgium;1%France;0.8%France;1%Egypt;0.9%Australia;4%India;3%Spain;3%RestofWorld;12%Poland;2%Taiwan;2%Vietnam;1%Denmark;1%Mexico;1%India;6%France;1%Japan;4%Netherlands;2%SouthKorea;3%Australia;4%UnitedStates;15%China;34%20GWMarkets2021Greece;1%Turkey;1%Germany;4%Spain;2%UAE;1%Brazil;2%Canada;1%©SOLARPOWEREUROPE2021LikeinthepreviousGlobalMarketOutlooks,nationalsolarassociationsfrommarketsthathaveaddedmorethan1GWinthepreviousyearhavebeeninvitedtopresenttheirlocalexpertviewsontheir‘home’markets(whichsometimesdifferfromourestimatesthatarebasedonseveralsources).Manyoftheseassociations,likeourorganisation,aremembersoftheGlobalSolarCouncil(GSC),whichisalong-timesupporteroftheGlobalMarketOutlook.FortheGW-scalecountriesforwhichwedidnotreceivecontributionsfromlocalassociations(thistime,China,Germany,SouthKorea,Taiwan),wehavewrittentheoverviewsbasedonourSolarPowerEuroperesearch.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025781.CHINASolarPowerEurope2.UNITEDSTATESSolarEnergyIndustriesAssociation(SEIA)3.VIETNAMGIZEnergySupportProgram4.JAPANJapanPhotovoltaicEnergyAssociation(JPEA)5.AUSTRALIASmartEnergyCouncil6.GERMANYSolarPowerEurope7.INDIANationalSolarEnergyFederationofIndia(NSEFI)8.SOUTHKOREASolarPowerEurope9.BRAZILBrazilianPhotovoltaicSolarEnergyAssociation(ABSOLAR)10.THENETHERLANDSHollandSolar11.SPAINUniónEspañolaFotovoltaica(UNEF)12.POLANDPolskieStowarzyszenieFotowoltaiki(PSF)13.TAIWANSolarPowerEurope14.MEXICOMexicanAssociationofSolarEnergy(ASOLMEX)15.UKRAINESolarEnergyAssociationofUkraine(ASEU)16.SOUTHAFRICASouthAfricanPhotovoltaicIndustryAssociation(SAPVIA)17.BELGIUMFédérationdesÉnergiesRenouvelables(EDORA)&OrganisatieDuurzameEnergie(ODE)18.FRANCESyndicatdesÉnergiesRenouvelables(SER)1.ChinaOverviewofPVdevelopmentsChinainstalled48.2GWin2020,representinga60%increasefromthe30.1GWinstalledin2019.AffectedbytheCOVID-19pandemic,mostoftheinstallationswerecompletedinthesecondhalfoftheyear,withamonthlyrecordof29.5GWinstalledinDecemberalone.Approximately68%oftheannualaddedcapacityconcernedlarge-scaleground-basedpowerstations,whiledistributedpowerstationsaccountedforabout32%.Regardingcumulativecapacity,Chinareached253GWattheendof2020,accountingforalmostone-thirdoftheglobalPVinstalledcapacity.Thistranslatestoa23%increasefrom2019.Fromthe253GW,utility-scalePVrepresents174GWanddistributedPVaccountsfor78GW.Withthesenumbers,themarketalmostreturnedtotherecord-levelitexperiencedin2017,endingtwoyearsofslowergrowth.Chinaremainstheworld’sNumber1intermsofbothannualinstalledsolarPVcapacityandtotaloperatingsolarPVcapacity.China’sPVmanufacturingindustry,theglobalworkbenchforsolarproducts,continuesitsexpansionacrosstheentirevaluechain.Thenationaloutputofpolysiliconreached392,000tonsattheendof2020,ayear-over-yearincreaseof14.6%,accordingtothelatestroadmapoftheChinaPVIndustryAssociation.Theproductionisexpectedtoreach450,000tonsin2021.Atthesametime,waferproductionof161GWisbelievedtoreach181GW;siliconcellproductionwillincreasefrom135GWin2020to152GW,andmoduleoutputisforecastedtoexpandfrom125to145GW.Solar/REtargetsInSeptember2020,China,todaytheworld’slargestGHGemitter,surprisinglyannouncedacarbonneutralitygoal.China’sPresidentXiJinpingannouncedduringtheUNGeneralAssemblythatthecountrystrivestobecomecarbonneutralbefore2050.InDecember2020,herevealednewtargetsalsofor2030:carbonemissionperunitofGDPwillbereducedby65%from2005levels.Toachievethis,thecountryaimsforatleast1,200GWofcombinedsolarandwindpowergenerationcapacity–solartakingthegreatershareofthetwo.Inits14thFive-YearPlan(14FYP),adoptedinMarch2021,Chinaaimstoincreaseitsshareofnon-fossilenergytoaround20%by2025,upfrom15.8%in2020.Thisispartofalargergoalaimingtoachievea25%shareofnon-fossilfuelsinprimaryenergyconsumptionby2030.Inthelast10years,theshareofnon-fossilfuelsincreasedby3-4%everyfiveyearsandstoodatroughly15%attheendof2020.The14FYPalsosetthebindinggoaltoreducecarbonintensityperunitofGDPby18%by2025.GlobalMarketOutlookForSolarPower2021-202579©SOLARPOWEREUROPE2021FIGUREGW1.1CHINAANNUALSOLARPVMARKETSCENARIOS2021-2025020406080100120GWHistoricaldataLowScenarioHighScenarioMediumScenario202220232024202520162017201820192020202148.236%16%11%8%12%71.345.371.4119.3DriverforsolarGrowthInChina,solarandwindarealreadycost-competitivewithfossilfuelgeneratedpowerandwillsoonbecheaperthancoal–withorwithoutCCS–evenwiththemostconservativeassumptionsonannualfullloadhours.ProjectionsbytheNationalDevelopmentandReformCommission(NDRC)illustrateasteadilydecreasinglevelisedcostofelectricity(LCOE)forsolarandwind,withsolarbeingthecheapestoption.Thetworenewablegenerationsourcesareconsideredaskeypillarsofthefutureenergysystem,asdemonstratedbyChina’sNationalEnergyAdministration(NEA)targetofinstallingatleast90GWwindandsolarin2021.StartinginAugust2021,Chinawillenterasubsidy-freeera,meaningthatthegovernmentwillnolongergrantsubsidiestolarge-scalesolarparksandlargerooftopsystems.Asthecomingendofsubsidieswasknownbyindustrialplayersinadvance,thismayalsoexplainthehighgrowthobservedin2020;theindustryconcludedmanyprojectsin2020inordertobenefitfromthefinalsubsidyoffers.ChallengesWhilethemostsignificantchallengefortheChinesesolarmarketin2020wascertainlytheCOVID-19outbreak,in2021thisissuehasalreadybeenleftbehind.Whathaslargelyaffectedthemarketsofarthisyearhasinsteadbeentheeffectofhighrawmaterialpricesonprojectsunderdevelopment.Severalplayersaredelayingtheirprojectsinthehopethatadecreaseinpriceswilloccur,whileotherprojectsaresimplybeingcancelled.Thishasresultedinanunderwhelminglevelofinstallationsinthefirstpartoftheyear:onlyabout10GWhavebeeninstalledinthefirstfivemonthsof2021.OutlookInthecurrentyear,thesolarindustryisexperiencinghighPVprices,somethingthatthreatenstomakeasignificantnumberofprojectsunviable.Inresponsetothis,NEAannouncedinJune2021thatprojectsapprovedin2019–2020thatdonotmeettheDecember2021deadlinewillnotberevokedandcanbeincludedinthe2022quota.Forthisreason,weexpectonlyaslightincreaseof14%intheChinesemarketin2021,at54.9GW,followedbyasurgeofinstallationsin2022whichwouldbringtheannualmarketto86GW(+57%).Weforecastthatthe100GWmarkcanbereachedasearlyas2025.Seeingthatseveralbiddings,flatpricesandultra-highvoltage(UHV)deliveryprojectswereannouncedin2020,theproportionoflargeground-mountedsolarisexpectedtofurthergrowin2021andbeyond.Authors:RaffaeleRossi&MichaelSchmela,SolarPowerEurope.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-202580400MW,Nangong,HeBeiProvince,China.©TrinaSolarGlobalMarketOutlookForSolarPower2021-2025812.UnitedStatesAsourday-to-daylivescontinuetochange,theU.S.solarindustryhasremainedresilientinthefaceofthepandemic.Despitemanychallengesoverthepastyear,theU.S.solarindustrykepttensofthousandsofworkersonthepayrollandnowemploysmorethan231,000Americans,accordingtotheNationalSolarJobsCensus2020.Whilethatwasa6.7%declinefrom2019,theU.S.solarindustrystillexperiencedgrowthinanumberofimportantareaswhenitcomestoourworkforce.Representationamongwomenandminoritydemographicgroupshasimprovedsignificantlysince2015,includinga39%increaseforwomen,92%increaseforHispanicorLatinoworkers,18%increaseforAsianAmericanandPacificIslanderworkers,anda73%increaseforBlackorAfricanAmericanworkers.Evendespitetheslightlossinjobsin2020,about5,000morewomenareworkinginthesolarindustrythanin2019.Thesolarindustryalsocontinuestooutpacetherestoftheeconomyinitsemploymentofveterans,whichrepresent8.7%ofthesolarworkforce,comparedto5.7%intheoverallworkforce.TheU.S.solarindustrycontinuestoadvocateforstrongpoliciesthatsupporthard-workingAmericansandcompanies.Withtherightsupport,wecanunleashthefullpowerofsolarenergy,creatingbillionsofdollarsininvestmentandhundredsofthousandsofnewjobs,allwhiletacklingtheclimatecrisis.Andweknowwhatpolicieswork.Attheendof2020,theindustrywasabletosecurea2-yearextensionoftheinvestmenttaxcredit(ITC)thatledtoa17%increaseinsolardeploymentinthe2021-2025forecast.AccordingtoforecastsfromWoodMackenzie,theITCwillcontinuetobehighlyinfluentialandwilldriverecordgrowthandinvestmentoverthenextthreeyears.TheITCisaprovenjobcreator,andalong-termextensionanddirectpayoptionwillhelptheindustrycontinuetogrowduringthiscriticaltimeinourhistory.FIGUREGW2.1UNITEDSTATESANNUALSOLARPVMARKETSCENARIOS2020-2025,BYSEIA05,00010,00015,00020,00025,000MWUtility-scaleNon-residentialResidential201020112012201320142015201620172018201920202021e2022e2023e2024e2025eSOURCE:SEIA©SOLARPOWEREUROPE2021TheU.S.solarindustryeclipsed100GWofsolarcapacityduringthefirstquarterof2021.Consumerdemandforresidentialsolarremainsstrongandisforecastedtogrow19%year-over-year,resultinginmorethan3.8GWofinstalledcapacityin2021.Utility-scalesolarcontinuestoleadthewayandjustsetarecordforfirstquarterinstallations,hitting3.6GW.Thepipelineforcontractedutility-scalesolarcontinuestoremainstrongandhasgrowntonearly77GW.Lookingahead,forecastsfromWoodMackenzieshowthatthesolarindustrywillinstall160GWofsolarcapacitybetween2021and2026,bringingtotalinstalledphotovoltaicsolarcapacitytomorethan250GWbytheendof2026.WoodMackenziealsoreleaseditsfirstlong-termforecastfortheU.S.SolarMarketInsightreportseriesthatshowsthatsolarcapacitywillquadrupleby2030.Whiletheindustryisontracktogrowfourtimesitssizeandemploymorethan400,000workersbytheendofthedecade,it’snotenoughtomeetPresidentBiden’sambitiouscleanelectricitygoals.Achievingthepresident’stargetswillrequireU.S.solarcapacitytogrowto1.2TWandfortheworkforcetogrowtomorethan900,000workersby2035.Coupledwithrisingcostsinthesolarindustry,businessasusualwillnotsufficeifwewanttoreachthesegoals.Withoutpolicyaction,thegapto100%cleanelectricityisbecominghardertoclose.CongressandtheBidenAdministrationneedtoactnowtodecarbonisethegridandcreatemillionsofAmericanjobs.TheAmericanJobsPlanisagreatstartforourindustry,butit’stimeforCongresstoputthisplanintoaction.Thesolarindustryisreadytoworkcollaborativelytobuildbackbetterinthepost-COVIDera.Togetherwecancreatenewjobs,expandeconomicopportunitiesforAmericans,andovercomeoneofthegreatestchallengesofourtime.Author:AbigailRossHopper,presidentandCEO,SolarEnergyIndustriesAssociation(SEIA).4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-202582150MWAC,California,USA.©FirstSolarGlobalMarketOutlookForSolarPower2021-2025833.VietnamSuccessstoryofthesolaruptakeinVietnamanditsdriversOverviewIn2020,Vietnamexperiencedinternationallyunprecedentedmarketgrowthinsolarenergyandjumpedintotheglobaltop3solarmarketsafterinstalling11.1GW.Consequently,solarPVaccountedfor23.9%ofthepowercapacitymix,equivalentto16,640MW,byDec.31,2020.Theinstalledcapacityiscomprisedof146ground-mountedandfloatingsolarutility-scaleprojects,withanaccumulatedcapacityof8,852MW,andmorethan100,000gridconnectedrooftopsolarsystems(RTS)with9,583MW.Thelatterhasbeeninstalledwithin2years.Withthisdevelopment,VietnamhaskickstarteditsdomesticsolarmarketsuccessfullyPolicyframeworkThemajordriversbehindthisimpressivestoryareattractivefiscalandeconomicincentives.Particularly,in2020,theFeed-in-tariff2(FIT2)1wassetat8.38,7.69and7.09UScent/kWhforRTS,floating,andground-mountedsolar,respectively.Notably,theFIT2rateforRTSwashigherthantheaverageretailelectricitytariff,whichwas8.35cent/kWhfrom2019to2020,whiletheFITforutility-scaleplantsalsoenabledfinanciallyviableprojectstobeattractiveforinvestors.Thefeed-incontractssignedundertheFITregulationhaveadurationof20yearswiththeannualpaymentbeingdeterminedbasedontheactualVND/USDexchangerate.TheFIT2wasvalidfromMay22,2020toDec.31,2020andcreatedarushtodevelopasmanyprojectsaspossiblebeforethedeadline.Installedsolarcapacitiescontinuedtogrowsteadilyinthethirdquarter,beforeexperiencinganincrediblejumpinthelastquarter,especiallyinDecemberwhereacapacityof6,855MWnewlyinstalledRTSwasrecorded.DriversFirstly,thereispoliticaldesireaswellassocialacceptance,whicharebothvitaldriversforsolaruptake.NationalDeterminedContributions(NDCs)ofVietnamandPolitburo’sResolutionontheOrientationofVietnam’sNationalEnergyDevelopmentStrategyto2030andFIGUREGW3.1VIETNAMPOWERGENERATINGCAPACITYINSTALLEDIN2020BYSOURCEOther(RE);7%Solar(rooftop);11%Solar(utility-scale);13%Gas;11%Other(non-RE);3%Coal;31%Hydro;24%2020NOTE:Theutility-scalesolarcapacityaccountsfor14%in2020.Addingthedistributedgridconnectedrooftopsolarsystems(RTS)capacity,theactualshareoftheinstalledsolarcapacityrisestoaremarkable23.9%inVietnam’spowergenerationportfolio.SOURCE:AnnualreportofVietnamElectricity(EVN),2020.©SOLARPOWEREUROPE20211Decision13/2020/QD-TTgonmechanismstopromotethedevelopmentofsolarpowerprojectsinVietnamdated6April2020.outlookto2045(Resolution55)affirmssignificantcontributionofrenewableenergyincludingsolarPVasaprioritisedmeasuretoreduceGHGemissions.Secondly,nationalenergysecurityisanotherimportantdriver.Duetothedelayofvariousstrategicfossilfuelpowerplantdevelopments,anationalpowershortagehasbeenexpectedfortheperiodfrom2020to2023.Vietnamismotivatedtoensureenergysecurityviarenewableenergy,especiallysolarPV,whichhasashortprojectrealisationtime.Lastly,thepreviouslymentionedattractiveFIT2andtheexpirationofthemechanismattheendof2020,pairedwithasharplydecreasingtechnologypricehastriggeredthisrapidsolaruptake.SolaroutlookAccordingtotheResolution55,theshareofrenewableenergy(includingsolar)ofthetotalprimaryenergyconsumptionistargetedtobe15-20%in2030,and25-30%in2045.Additionally,thedraftoftheNationalPowerDevelopmentPlan(PDP)VIIIstatesthattheinstalledcapacityofsolarPVisexpectedtobe17,240MWin2025and18,640MWin2030.However,consideringthecurrentinstalledcapacityofmorethan16GWsolarPVasofDecember2020,onlylessthan2GWnewlyinstalledcapacitywouldbetargetedforthenext10yearsaccordingtothePDPVIIIdraft.ThisraisesquestionsaboutthelowambitionofthegovernmentintermsofREdevelopmentinthefuture.Additionally,therearenoclearlydefinedtargetsspecificallyforground-mounted,floating,andRTScategories.TheseconcernshavebeenraisedbyvariouspartiesandthegovernmenthasbeenaskedtoadjustthesolartargetinthePDPVIII.Nevertheless,thereareadditionalregulatorydevelopmentsthatmayimpacttheutility-scalesolarandRTSdevelopmentsinthenextyears,ormaybeevenalreadyin2021:•Utility-scalesolar(ground-mountedandfloating):FIT2expiredattheendof2020andthereisnoimmediatefollow-upregulation.AdirectPPAmechanismisunderdevelopment.•Rooftopsolar:Inthefirsthalfof2021,adraftFIT3ratehasbeendevelopedbutisnotyetpublished.Thecurrentversionofthedraftpromotesashifttowardsself-consumption.AnannualadjustmentoftheFIT(insteadofhavingtopublishanewregulationeachyear)isbeingdiscussedaswell.Whetherthereis4GW-scalemarkets/continued84FIGUREGW3.2VIETNAMENERGYCAPACITYMIX2030AND2045ACCORDINGTOTHEDRAFTPDPVIIIBiomass&other;3%Biomass&other;2%Wind;8%Wind;20%Solar;5%Solar;9%Gas&oil;23%Gas&oil;26%Imported;4%Imported;2%Coal;41%Coal;31%Hydro;16%Hydro;10%20302045NOTE:PowercapacitymixaccordingtotheDraftPDPVIII.Notably,theinstalledsolarcapacityattheendof2020hasalmostreachedthetargetfor2030.SOURCE:DraftreportofPDPVIIIforpublicconsultationon22/02/2021.©SOLARPOWEREUROPE2021GlobalMarketOutlookForSolarPower2021-202585notablenewlyinstalledcapacityofsignificantlymorethan1GWin2021willdependonhowquicklythedraftispublished.Ifthedraftisnotpublishedthisyear,theinstalledsystemswillonlybe100%self-consumptionsystems(self-ownedorprivatePPA).Inbrief,theinstalledsolarcapacity(bothutility-scaleandRTS)isexpectedtobelowin2021butcouldexperienceanotheruptake,ifwell-designedmechanismsthatpromoteasustainablelong-termmarketaredevelopedandannouncedintime.ChallengesAmongvariouschallengesthatyoungsolarmarketssuchastheVietnameseoneface,twokeybarriersaffectingthecurrentdevelopmentarenotable.Veryshort-termpolicythatlacksclarityisamajorchallenge.TheshortdurationofFIT2withavalidityofonly7monthsledtoapressingdemandinproducts,services,delivery,andgridconnection.InDecember2020,thehighdemandresultedina30%increaseofthesolarPVsystemprice.SincetheexpirationofFIT2onDec.31,2020,nonewpolicyhasbeenannounced.Intheworstcase,thisgapinpolicymightcauseamediumtolong-termmarketdistortioninthecomingyearsoreveninthebest-casescenario,atemporaryshort-termmarketcollapse.AsynchronousdevelopmentsofsolarPVandgridprojectsleadtoPVpowercurtailment.Indeed,thedevelopmentofsolarPVprojectsoutpacedthetransmissiongridprojects,whicharedefinedtobefinanced,operatedandmanagedexclusivelybyVietnamElectricity(EVN)NationalTransmissionCorporation.ConclusionDespitetheunexpectedimpactstotheinvestmentaswellasongridoperationduetotheshort-termpolicy,stilltheVietnamsolarmarketremainsquitepromisinginthemiddle-term.Indeed,duetothefactthatmanybigcoal-firedpowerplantandgas-turbineplantswillcomelateduetolengthynegotiationprocessandlimitedfinancialaccess,toensurethenationalenergysecurityandenergyindependency,opportunityforfurtherdevelopmentofsolarPVisstillacknowledged,especiallydecentralisedrooftopsolar.ThepilotdirectPPAmechanismshallfacilitatethenewflyofthemarketevenwithoutanyfeed-intariff.Author:GIZESPVietNam50MW,HaDoNinhPhuoc,NinhThuan,Vietnam.©NguyenQuangNgocTonkin/Shutterstock.4.JapanOverviewofPVdevelopmentsTheJapanPhotovoltaicEnergyAssociation(JPEA)estimatesthataround8.2GWDC(6.6GWAC)wasinstalledin2020,resultinginacumulativeinstalledPVcapacityof71.4GWDCendof2020.Afterreachingtherecordcapacityadditionof10.8GWDC(equalto9.8GWAC)in2015,theJapanesePVmarkethasbeentrendingdownwardsfollowingthereducedFITsupportforSolarPV.Althoughtheinstalledcapacitywentupin2020,thegeneraldownwardstrendisunchanged.TheapprovednewFITprojectsdroppedtosome1.5GWACin2020,indicatingfurthermarketcontractionsarelikelyincomingyears.However,weexpectthePVmarketwillreturntoastateofgrowthagainfrom2022onwards.Japan’snewemissionsreductiontargetof46–50%by2030,doublingtheprevioustargetof26%,willrequirealargeincreaseofrenewableenergysharesinJapan,inparticularforsolarPV.JapaneseSolarandRenewableEnergyTargets•ThegovernmenttargetofSolarPV:Accordingtothe‘Long-termEnergySupplyandDemandOutlook’(EnergyOutlook)publishedbytheMinistryofEconomy,TradeandIndustry(METI)in2015,thecumulativeinstalledPVcapacitytargetfor2030is64GWAC.This‘old’targetisunderreviewbyMETItomeetthenewambitiouscarbonreductiontargetof46–50%by2030.•JPEA’svision(PVOUTLOOK2050):InourPVOUTLOOK2050releasedinMay2020,thecumulativeinstalledPVcapacitywasexpectedtobearound100GWACin2030.However,inaccordancewiththenewnationalGHGreductiontarget,JPEAhasrevisedthis100GWACtargetupwardsto125GWAC(150GWDC)by2030.Thisnew,muchmoreambitioustargetmeans,onaverage,some8GWDCsolarPVwillhavetobeinstalledeveryyearuntil2030.DriversforSolarGrowthinJapan•TheFITschemehasbeenthestrongestsupporterforthegrowthofsolarPVinJapan.However,theFIT’sroleisgraduallygettingsmaller,andamore4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-202586FIGUREGW4.1JAPANANNUALSOLARPVMARKETSCENARIOS2021-2030,BYJPEA024681012GWDCHistoricalPVoutlook20502013201420152016201720182019202020212022202320242025202620272028202920308.210.8SOURCE:JPEA.©SOLARPOWEREUROPE2021GlobalMarketOutlookForSolarPower2021-202587market-orientedFIP(Feed-inPremium)willbeintroducedin2022,whichisexpectedtobeanewdriverforsolardemand.•Thenewnationalcarbonreductiontarget46–50%by2030isagamechangerforthegovernment’senergypolicy,andsolarPV’saccelerateddeploymentisthekeysuccessfactortomeetthistarget.Theexpectedgovernmentsupportwillbeastrongdriver.•The“self-consumptionbusinessmodel”forcommercialandindustrialusersisexpectedtogrowinJapaninthecomingyears.AstheLCOEofsolarPVisalreadycomparabletovariableretailelectricitypricesforcommercialandindustrialusers,on-siteself-consumptionPVsystemsarebecomingattractivetocorporateusers.Utility-scalevs.Distributed&RooftopSolarDevelopment•SolarPVbelow10kW,mostlyresidentialrooftop,installedin2019was0.7GWAC.JPEAexpectsthissegmentwillgrowstronglyduringthisdecadeuptoa2GWlevelsupportedbyFITandvarioussubsidiesfornet-zeroenergyhouses(ZEH),batterysystems,andotherdrivers.•DistributedsolarPVunder1MW,mostlyground-mounted,isonadownwardtrendsince2016,mainlyduetoreducedFITsupport.Thissegmentrequiresabusinesstransformation,forexamplefromasimpleground-mountedsystemtoaself-consumptionsystemintegratedwithREusers’and/orlocalcommunity’s’energydemand.JPEAexpectsthatwiththistransformationthesegmentwillgrowagain.•Mega-wattscalesolarPVsystemsof1MWandaboveincludingutilityscalearealsotrendingdownwards.InadditiontotheFITreduction,reductionindemandisduetopowergridconstraintsandlandavailability.JPEAexpectstheseconstraintstobeovercomeandwithimprovedcostcompetitiveness,thissegmentislikelytostartgrowingagaininthelate2020s.FIGUREGW4.2JAPANANNUALSOLARPVDEVELOPMENT2013-2020,BASEDONMETIDATA0123456GWAC20132014201520162017201820192020Utility-scale(over1MW)C&I(under1MW)Residential(under10kW)SOURCE:METI.©SOLARPOWEREUROPE2021Challenges•SmoothtransitionfromFITtoFIP:In2022,FIPswillbeintroducedasmandatoryincentivemechanismforlargescalesolarPV(1MWandabove)andoptionalfordistributedsolarPV(50kW–1MW).OneofthebiggestchallengesfortheindustryandforpolicymakersisthesmoothtransitionfromFITstomoremarket-orientedFIPs.•Businessmodeltransformation:TheFIT/FIPschemehasbeenandwillbethemostimportantgrowthderiverforsolarPV.However,theroleofFIT/FIPwillgraduallyshrinkinthecomingyears.WiththeemergenceofcorporatePPAtypebusinessmodels,JPEAseesthisdecadeasthetransitionperiodtowardsthegrowthwithoutFIT/FIP.•Gridconstraints:LimitedgridcapacityandcurtailmentrisksaretheprimarycausesforthedownwardmarkettrendinJapan.METIhastakenseveralmitigationmeasurestomaximisegridcapacitywithexistingassets,suchasthe“ConnectandManage”programfortransmissionandlocalgridlevels.Moreover,METIhasstartedplanningthelong-termgridexpansionprogramtoaccommodatelargeamountsofrenewableenergy.•Landavailability:Newbusinessmodelswithoutdedicatedlandspace(e.g.on-siteself-consumptionmodels),andutilisationofunused/abandonedfarmlandareasolutiontothelimitedlandavailabilityproblem.Todate,conversionofunused/abandonedfarmlandtosolarfarmsisverylimitedasitrequiresstrictlegalproceduresandlocalauthorities’permission.Thegovernmentisnowtacklingthoseconstraintsbyreformingexistinglawsandregulations.•Costcompetitiveness:ThecostofsolarPVinJapanishighercomparedtoaverageinternationallevels,mainlyduetoexpensiveconstructionandsoftcosts.Reducedcapex(mostlyconstructioncosts)andlongerlife(e.g.from20-yearlifetoover30years)arekeychallengesfortheindustry.TheFITfornon-residentialPV(50kWto250kW)wassetinfiscalyear2021at11JPY/kWh(10UScents/kWh).Theaverageelectricitywholesalespotmarketpricein2019wasapproximately8JPY/kWh(7.3UScents/kWh).JPEAexpectsthatgridparitywillbeachievedby2030.ThegovernmenttargetsaPVLCOEof7JPY/kWh(6.4UScents/kWh)between2025and2027.Author:JapanPhotovoltaicEnergyAssociation(JPEA)4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-202588©WorldStock/ShutterstockGlobalMarketOutlookForSolarPower2021-2025895.AustraliaOverviewofPVdevelopmentsOurreportontheAustralianmarketlastyearwasdraftedinthewakeofdevastatingnaturaldisastersandasCOVID-19wascausingsignificantlocalandinternationaldisruptions.Theprimarysupportscheme,thenationalRenewableEnergyTarget(RET),hadcommenceditswinddownto2032forsmallscalecertificates(STCs,forunder100kWsystems)andthelarge-scalecertificatescheme(LGCs)wastoendin2020.Ouroutlookwasforamodestincreaseinrooftop(residentialandC&I)overthecourseof2020from2.3GWtoaround2.7GWandforananticipatedreductioninlargescaleinstallationsfrom2.3GWtoaround1.7GW.Wewereverywrongforrooftopsolar!Therooftopsectorhasbeenboomingin2020althoughthereweresignificantvariationsacrossstatesandterritoriesinAustralia.Inparticular,itwasadifficultyearinVictoria,whichhasasolarPVandbatterysupportschemeinplace,wheretheSolarHomesScheme1causeddelaysandslowsalesinthemarket.Acrossthecountry,rooftopsolarincreasedby3GWin2020,whilelarge-scaleandmid-scalesolarcapacity(100kWto30MW)decreased29%,duetodifficultbusinessconditionsduringCOVID-19.Totalrooftopsolarisnowover13GW.Large-scalesolarcameinatjustunder900MWin2020wherearangeofconnectionissuesandincreasingregulatoryuncertaintycauseddelaysandreducedthepipeline.However,bytheendof2020,therewere49large-scalesolarfarmsunderconstructionofaround3GWwhichindicatesarebound.Withadditionsofaround260MWinC&I,atotalof5.1GWwasinstalledin2020,just5%upfrom2019.Thiswasanincreaseofapproximately23%inrooftopsolarandaslightdecreaseinutilityscale;witharound278,000rooftopsystems,theaveragenewinstalledsystemsizeisnow>8kW!Solar/REtargetsTheresidentialrooftopmarketremainsthestrongestdriverwiththeRETstillofferingvalueformoney.Theinstallationsin2020were40%upyear-on-year,andin2021wehaveseenrecordsbrokeneachmonth.ThestatesandterritoriescontinuetoleadwithVIC,ACTandSAofferingmeans-testedloworno-interestloansforsolarPVandbatteries.Thelarge-scaleRenewableEnergyTargetof33,000GWhwasmetattheendofJanuary2021witheligiblegenerationfrom1February2020to31January2021,reachinganestimated33,100GWh.©SOLARPOWEREUROPE2021FIGUREGW7.1AUSTRALIAANNUALSOLARPVMARKETSCENARIOS2021-2025GW024681012HistoricaldataLowScenarioHighScenarioMediumScenario8.15.110.55.92022202320242025201620172018201920202021-1%37%-10%13%6%5.11https://www.solar.vic.gov.auDriversforsolargrowthThemarkethaschangeddramaticallywithconsumersfocusingonself-consumptionratherthanexportpricesasthewholesalemarketisseeingregularlowandnegativeprices.Thedemandremainsstrong.Forbothmid-andlarge-scaleweareseeingincreasedinterestinPPAsfromarangeofbusinesseswiththatdemandpullinginvestorsotherwisehesitantonmarketconditions.COVID-19seemstohavehadarelativelymodestimpactonPPAdemandandmanyoftheorganisationshaveincreasedprofitability.Domesticandinternationally-ownedcompanieshaveESG/sustainabilitytargetsand/orpolicygoals,andnewcorporateregulatoraccountingguidelinesmandateclimatechangeriskinreporting.ThehighlycompetitivecostsofrenewablegenerationinAustraliameanscorporatesareseeingPPAsasahedgeagainstvolatileelectricityprices.ThishasalsoseenrooftopsolarinstallationsoncommercialbuildingassetsinadditiontoPPAs.Forexample,IKEA,Woolworths(groceriesandliquorretailer),WesFarmers,parentofnationalleadingbusinessessuchasBunnings(big-boxhardware),Coles(groceriesandliquorretailer),andMyer/KMart(departmentstores)arerollingoutrooftopPVonallpremisesandhavePPAstoo.SurveyssuggestaPPAdemandpipelineofaround600-800MWforsolarinthecomingtwoyears–notingtheleadtimesarearoundayear.In2020theinvestmentwasaround2.4billionUSDand1GWofRE,forbothsolarandwind.Utility-scalevs.distributed&rooftopsolardevelopmentandplansThesplitwillremainskewedtowardsrooftopsolarforafewyears,buttherearenowseveralmega-scaleprojectsinthepipelineandwelldownthedevelopmentpath.TheseincludetheAsiaRenewableEnergyHubof26GWwithabout12GWofsolarandtheSunCableProjectof10GWofsolaranda50GWhubtobebuiltinSWWesternAustralia.ChallengesTheprimarychallengesremainpoliticalwithafederalgovernmentactivelypromotingfossilfuels,eventotheextentoffundingnewgasplantswithacapacityfactorof2%.Theinabilityofregulatorystructurestokeepupwiththerapidtransitiontoadistributedenergyresources(DER)modelandthelackofpoliciesonorderedclosuresofexistingandagingcoalplantsisabarriertoinvestment.OntheplussidearethehighlysupportivepositionsoftheState&Territories4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-20259010MWGreenoughRiverSolarFarm,WesternAustralia.©FirstSolarwhichhaveallagreedtotargetsofnetzeroby2050andhavestrongroadmapstogetthereincludinginterimtargetsandpoliciestomeetthem.Therehavebeenpriceincreasesformodulesandsystemsin2020and2021duetoglobalshortagesofsilicon.TheUSAversusChinageopoliticalposturingisalsohavingsomeimpacts.OutlookQuarter1of2021sawcontinuedgrowthinrooftopsolarwithanestimated792MWinstalled,up28%onQ12020pointingto3.6-4GWofrooftopsolarcapacitytobeaddedin2021.IftheC&I>100kWcontinuestoimproveanother300MWcouldbeadded.Large-scalesolarislikelytobeagainataround2.2to2.5GWin2021.Thenexttwotothreeyearswillseetheconstructionstagesofthemega-scaleplantsalreadyannouncedandothersoflargevolumes,butsmallerconfigurationstobetterfitindistributedRenewableEnergyZones(REZ)announcedbytheVictorianandNSWgovernments.Thatwillpossiblyseeunprecedentedrolloutsof>120GWinthecomingyears,justwithknownproposals.Thetwolargesttotalling86GWwillbehybridplants,primarilyforgreenhydrogenproduction,andfocusedonammoniaforfertilisersandshippingfuel.Author:SteveBlume,President,SmartEnergyCouncil(SEC)GlobalMarketOutlookForSolarPower2021-202591100MW,YarranleaSolarFarm,Queensland,Australia.©RisenSolarTechnology6.GermanyOverviewofPVdevelopmentsAfterasuccessfulyearforsolarin2019with3.9GWinstalled,Germany’ssolarmarketgrewfurtherin2020.Overthecourseoftheyear,4.9GWwasinstalled,a26%growthcomparedto2019.GermanyhasregaineditsroleastheleadingEUsolarmarket:notonlydidthecountryclaimthelargestmarketinEurope,italsohadthelargestoperatingPVfleetintheEU(54.6GW),andthehighestratioofsolarcapacitypercapita,0.65kWperinhabitant.TheoutlookforsolarinGermanylooksverypromising,with6.2GWadditionsexpectedfor2021,and7GWyear-on-yeargrowthin2022.Weanticipatethatby2024themarketwillexceed10GWforthefirsttime.SolarPVTargetsinGermanyDespitethetrendssuggestedthatGermanywouldnotbeabletomeetitsEUrenewabletargetof40%greenhousegas(GHG)emissionreductionby2020,ultimatelyandsurprisinglythetargetwasreachedontime.DuetotheeffectsoftheCOVID-19crisis,carbonemissionsinthetransportandenergydecreasedsignificantlyin2020.However,consideringtheprogressivereductionoftheCOVID-19measures,thiscouldbeinterpretedasonlyatemporaryachievement.Solarwillplayakeyroleintheenergytransitionandthephase-outfromnuclearandcoal,scheduledfor2023and2038respectively,toarenewable-basedenergysystem.Germany’snewRenewableEnergyAct2021(EEG2021),passedattheendof2020,setacarbonneutralitytargetby2050anda100GWsolarcapacitytargetby2030.InJune2021,thenewClimateProtectionActsetabindingpathtoclimateneutralityandmovedtheyearofachievementto2045insteadof2050.TheinterimGHGemissionreductiontargetfor2030isalsoraisedto65%.Conversely,theadjustmentofthecrucial2030RESsharetargetinelectricityconsumptionhasbeenpostponedto2021aftertheparliamentelectionstakeplace.AnationalEmissionTradingSystem(ETS)forheatingandtransportfuelshasalsobeenintroducedinJanuary2021.ThisschemecomplementstheEU-wideETS,whichcurrentlydoesnotcoverthefuelsusedintheheatingandtransportsectors.AtransitionphasehasstartedwithafixedandratherlowCO2priceof25EUR,increasingeachyearupto55EURin2025,andwillbefollowedbyanauctionsystemwithminimumandmaximumpricesstartingin2026.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-202592©SOLARPOWEREUROPE2021FIGUREGW5.1GERMANYANNUALSOLARPVMARKETSCENARIOS2021-2025GW20222023202420252016201720182019202020214.924%26%15%16%7%7.07.713.5024681012145.2HistoricaldataLowScenarioHighScenarioMediumScenarioDriversforSolarGrowthWithinthecontextoflarge-scaleauctions,threetypesoftendersthatinvolvedsolaroccurred:regularsolartendersforprojectsbetween750kWto10MW,specialtendersforprojectsofthesamesize,andmixedwindandsolartenders.Regulartenderstookplacethreetimesayearwithavolumeof2x150MW,1x175MW,and2x500MW.Thesetendersweretechnologyspecific.Tosupporttheachievementofitsrenewableenergytargets,in2018thegovernmentcoalitionagreedtoorganiseextratendersover3years,accountingforatotalsolarcapacityof4GW(2019:1GW;2020:1.4GW;2021:1.6GW),inadditiontotheregulartenders.Moreover,thetechnology-neutraltendersawardedin2020repeatedthepatternofthepreviousyear,withsolarwinningalloftheauctionedcapacity.Ontopofthesethreetendertypes,inMarch2021thesecondtechnology-neutralinnovationtendertookplace,wheresolar&storageprojectswereawardedallthe258MWtenderedcapacity.InthepreviousroundinSeptember2020,nearlyallthe650MWcapacitywasawardedtosolarprojects,withmorethanhalfofthiscapacityincludingbatterystorage.WiththeClimateProtectionAct,thegoverningcoalitionagreedtogiveashort-termboosttorenewabledeploymentthroughhighertendervolumesfor2022.AuctionedsolarPVcapacitywillgrowfrom1.9GWto6GW,withtheextracapacityequallydividedbetweenutility-scaleandrooftopsystems.Additionally,50MWofcapacitywillbeallocatedtoaninnovationtenderspecificallyforspecialsolarsystemslikesolarcarports,agrivoltaics,andfloatingsolar.Theself-consumptionregimeunderwentprofoundchangeswiththeapprovalofthenewEEGlawinJanuary2021.Onthenegativeside,asofthisyear,onlyPVsystemswithacapacitybelow300kWwillfullybenefitfromtheself-consumptionscheme.Installationsbetween300–750kWcanonlysellupto50%tothegridforafeed-inmarketpremium.Alternatively,operatorsofthissystemrangecannowparticipateintenders.Onthepositiveside,operatorsofsmallcommercialsystemsfrom10–30kWdonothavetopaytheFITsurchargefortheirself-consumedsolarpoweranymore.ThenewEEGlawraisedfrom10kWand10MWh/yearto30kWand30MWh/yearthethresholdforwhichrooftopsystemsarefullyexemptedfromtheEEGlevyforself-consumption.Thiswillinducethedeploymentofsmallcommercialsystemsoflargersize.In2020,theC&Isegmentintotalgrewonlymarginally,with2.9GWinstalledyear-on-yearduetoadecreaseinfeed-inpremiums.Withtheplannedtenderedcapacityforthe300–750kWtobesignificantlylowerthanthecurrentinstallationlevelsofthissegment,GlobalMarketOutlookForSolarPower2021-202593Bavaria,Germany.©MarkusSpiske/Unplashthiswillresultinanannualgapof75%.Duetothesechanges,adecreaseinthissegmentisanticipated.Residentialsolarexperiencedstronggrowthin2020,with1.1GWinstalled.Thesegmentdoubleditsyearlyinstalledcapacitycomparedtothepreviousyear.TheEEGrevisionalsobroughtpositivechangesforcommunitysolarsystems,asegmentthathasbeenlaggingbehindexpectationsforyears.Amongothers,operatorsdonothavetosupplypowerdirectlytothetenant,butalsoviathirdparties,likeutilities,whichisexpectedtomaketheschememoreuseful.FollowingHamburg,Bremen,andBaden-Württemberg,thecityofBerlinestablishedinJune2021amandatetoinstallrooftopPVonallnewandrenovatedbuildingswithausableareaofatleast50squaremeters.Introducingsuchameasureatthenation-widelevelhasbeenproposedbytheFederalMinistryofEnvironment,butthishasbeenmetwithresistancefromtheFederalMinistryofEconomics.ThehigheconomicappealofresidentialsolarinGermanyhasledtoanotherpromisingtrend:theemergenceofarapidlygrowingmarketforbatterystorage.AsdescribedinSolarPowerEurope’sEuropeanMarketOutlookforResidentialBatteryStorage2020–2024,GermanyisdrivingtheEUmarketforhomebatteries,with70,000unitsexpectedfor2020,whichisequivalenttoastoragecapacityofover500MWh.Inthiscontext,thelatestamendmentoftheEnergyIndustryActinJune2021removeddoublechargesandleviestobatterysystems,whichwillbethereforeenabledtobetterusetheirflexibilitypotentialintheenergysystem.Nexttocapacityinstalledthroughtheself-consumptionregimeandauctions,PPA-basedprojectsarethethirdpillarofsolardevelopment.Large-scalemerchantsolarisanemergingtrendintheGermanmarket.Forexample,EnBW’s187MWsubsidy-freesolarparkisthelargestPVplantinthecountryandbeganoperationsinlate2020,whileseveralothersimilarprojectsconnectedtothegridoverthecourseoftheyear.Asutilities,largeinvestmentfundsandprivateinvestorsareveryactiveinthissegment,weanticipatethePPAmarkettogrowstronglyinthecomingyears.ChallengesTheauctionschemeforsystemsbetween300–750kWintroducedinMarch2021appearsunsuitabletothecountry’senergytransitionneeds.Mid-sizedrooftopsystems,whichhavebeenamajorcontributortosolardeploymentinGermanyinrecentyears,areexpectedtobeseverelyaffectedbythenewrules.The100GWtargetfor2030appearsunambitiouscomparedtothemarketdynamicsandtheurgetotransitiontheenergysector.GermanPVassociationBSW-Solaraskedtoraisethetargetto200GWtoensureatimelyreplacementofnuclearandcoalcapacitywithrenewablesources;theGermanAssociationofEnergyandWaterIndustriesBDEWaskedfor150GW.Majorpolicychangesareunlikelytooccuruntiltheendoftheyear,asthecurrentlegislativetermiscomingtoacloseduetoupcomingelectionsinSeptember2021.Againstthisbackground,thenewgovernmentwillbetaskedwithrapidlyaddressingtheissueofincreasingtheinstallationrateofrenewableenergyandsettinganewREStargetfor2030.AmajormarketbarrierisrepresentedbythedigressionratesunderthecurrentFITscheme.TheremunerationdigressionmechanismhasalreadygiventangiblenegativeresultsontheattractivenessofsolarPV.Further,thepostponementofthediscussionaroundthenewREStargetexacerbatestheissueanddelaysthemuch-neededrapidexpansionofrenewablecapacityinthecountry.Authors:RaffaeleRossi&MichaelSchmela,SolarPowerEurope.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025947.IndiaOverviewofPVdevelopmentsWithaninstalledcapacityof41GW(source:MNRE),Indiaisnowthe5thlargestcountryintermsofinstalledsolarcapacity,globally.Withalmost300sunnydays,Indiaisblessedwithanabundanceofsolarenergy.In-linewiththeresourceavailability,theIndiangovernmentsetupatargetof20GWby2022in2012,whichwasrevisedin2014to100GWofsolarcapacityby2022.In2019,IndianPrimeMinisterNarendraModiannouncedattheUnitedNationsthatIndiaintendstoprocurearound450GWofitselectricityfromrenewablesby2030,with300GWcomingfromsolar.TheIndiangovernment’sresolveforambitioustargetshasalreadystartedpayingdividends.India’sinstalledsolarcapacitysoaredfrom3GWto40GWinlessthanadecade.However,inordertomeetits100GWtarget,nearly60GWneedtobeinstalledby2022.COVID-19impactonIndianSolarMarketin2020In2020,thecountryobserved,nation-widelockdownsstartingMarch’20amidtheCOVID-19pandemic,whichcausedlabourmigration,resultinginascarcityofworkforcesonsites,andputtingprojectconstructionsonhold.InMarch2020,India’sgovernmentdeclaredgreenenergyasanessentialservice,toensurethatrenewableenergyprojectsdidn’tcometohalt,andalsotoensurethatpowergenerationfromsuchplantsisabsorbed.Butsupplychaindisruptionsandreducedmanpowerduetoworkrestrictionsresultedindelayedcommissioningofprojects.Normally,delayedsolarprojectsfacepenaltiesunderIndia’sstrictcommissioningtimelines.Ablanketextensionof5monthswasprovided,becausethelockdownwasconsidereda‘ForceMajeure’condition.EvenwithCOVID-19lockdownsacrossthecountryandreduceddemand,REgenerationincreasedby41.29%inOctober2020incomparisontoOctober2019.GlobalMarketOutlookForSolarPower2021-202595AllinstalledcapacitydatainthisarticleonIndiaareACcapacitiesSOURCE:NSEFI.©SOLARPOWEREUROPE2021FIGUREGW6.1INDIATOTALSOLARPVCAPACITY2009-2020,BYNSEFI05,00020,00015,00020,00025,00030,00035,00040,000MW2009-20102010-20112011-20122012-20132013-20142015-20162016-20172017-20182018-20192019-20202008-2009311369361,6843,0025,1299,00020,00028,30037,500Solar/REtargetsIndia’sambitious300GWby2030goalhastriggeredahighintensityofsolarenergydeploymentinthecountry.ToachievethisambitioustargetIndianeedstoinstall25-30GWofsolarperyearforthenext10years.Currently,alargenumberofprojectsequaltoacapacityofalmost40GWareinthecommissioningphaseorauctionedandareawaitingthesigningofPowerPurchaseAgreements(PPA).InordertoresolvetheofftakechallengeofstateDISCOMssufferingfromlowcreditratingsmostoftheprojectsaretendered/allottedwithstateownedcompanies(CentralPSU)asthemainintermediaries.WhileCentralPSUsareresponsiblefortenderingabout72%,stategovernmentsareresponsibleforonly24%.DriversforsolargrowthIncreasedTenderActivity:Withlessthan2yearstoachievethe100GWtarget,IndiahasaccelerateditstenderingactivitydespiteCOVID-19.Thesetendersnotonlyreceivedanoverwhelmingresponsebutalsocontributedtorecord-makingtariffs.InFebruary,India’sfirst‘round-the-clock'(orsocalledpeakpower)tenderforacontractedcapacityof1.2GWwaslargelyoversubscribedfor.Itreceivedhighlycompetitivebidsandresultedintheworld’slowesteverrenewable+batteryquotedpeaktariffofRs.6.85/kWh.DecreasingPVTariffs:Infact,alltendersduringthelockdownphaseachievedequallyhistoricmilestones.AwardedpriceskeptdecreasingthroughouttheyearandreachedanewlowinDecember2020withatariffofRs.1.99fora500MWtenderinGujarat.AnoverviewofthepricetrendcanbeseeninfigureGW6.2.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-202596SOURCE:NSEFI.©SOLARPOWEREUROPE2021FIGUREGW6.2INDIATRENDINSOLARPVTARIFFSDISCOVERED2014-2021,BYNSEFI01234567INR/kWh2015-20162016-20172017-20182018-20192019-20202020-20212014-20156.174.343.32.442.442.361.99AstheUniongovernmentaimstopromotedomesticmanufacturingofsolarproducts,aPerformanceLinkedIncentive(PLI)hasbeenintroducedthatislinkedtonewmanufacturingcapacity.TheIndiangovernmenthasapprovedatotalamountof4,500crores(~600MillionUSD)forincentivisingmanufacturerssettinguptheirmanufacturingunitinIndia.ThisPLIisexpectedtobedisbursedoveraperiodof5yearsandwillsignificantlydependonthepercentageoflocalvalueaddition.GreenDayAheadMarkets:In2021,theUnionGovernmentofIndiadeclareditsintenttomovetowardsacentraliseddispatchmodelwithamarketcouplingmechanism.ThismodelwillbeinstrumentalinmappingthesuccessofREinthecountrybyresolvingmultipleissuesofcurtailmentanddelayedpayments.Forlarge-scaleintegrationofREpower,inordertoincreaseitsshareintheenergymix,theGreenTermAheadMarket(G-TAM)waslaunchedinIndia.Additionally,aDayAheadMarketsolelyforgreenenergytradingwillbesoonlaunched.Suchnewmeasureswillensurethatgreenpowerissoldinthemarket,therebyincreasemarketliquidity.FreeTransmission:InJune2021,theMinistryofPowerinIndiaexemptedsolarandwindpowerassetsinthecountryfrompayingInter-StateTransmissionSystem(ISTS)chargesforprojectscommissionedtillJune30,2025.ItwillreplacethepreviousdeadlineofJune30,2023.TheextendedISTSwaiverwillalsocoverpumpedhydroorbatterystorageif70%oftheenergystorageismetviasolarorwind.TheISTSwaiverwillbealsoapplicablefortradingelectricityoverthepowerexchange(G-TAM,G-DAM).Utility-scalevs.distributed&rooftopsolardevelopmentandplansIn2021,Indiaisexpectedtoaddaround6-8GWofsolarPVpowercapacitylargelydrivenbyauctionsheldintheyears2018-19.In2022,another10-12GWofadditionalsolarPVpowercapacityisexpected.Fornow,India’ssolarmarketismajorlydrivenbylarge-scalegroundmountedprojects.InMarch2021,around70%ofIndia’sinstalledsolarcapacitycamefromutility-scaleplants.Inthelast5years,a226%increasehasbeenachievedbythecountry.Thecountry’sinstalledsolarcapacityiscomposedofaround35.65GWground-mountedand4.44GWofrooftopsolarwhilearound2.5GWsolar(outof11.5GWintotal)hasbeenaddedinoff-gridareas.Withmanyutility-scaleprojectsinthepipeline,thetrendtowardslargesolarpowerplantsislikelytocontinue.Ground-mountedsolarprojects,whichpredominantlyoperateundertheSolarParksandUltraMegaSolarPowerProjectsschemes,aretenderedbythegovernmentthroughareversebiddingprocess.TheStateofMaharashtrahasrecentlyallowed100%REprocurementbycorporateswishingtooffsettheirenergyneeds,whichisanotherwelcomesteptoacceleratethedisseminationofsolar.WhileOpenAccessisallowedforsubsidy-freeprojectsbeyond1MWcapacityacrossallstates,itisjustinthestartingphase.ButwithmoreeaseinavailingOpenAccessforcorporatepowersourcing,thesolarindustrywillbecomethemainsourceduetoitscostadvantages.RooftopsolarisyettopickupinIndia.Commercialandindustrialentitiesarethelargestinvestorsinrooftopsolar.Butwithlessthan5GWrooftopsolarinstalledbyendof2020,meetingtheNationalSolarMission’srooftopsolartargetof40GWbyendof2022remainsagiganticchallenge.Fortheproliferationofrooftopsolarinthecomingyears,thegovernmenthastakenseveralnewprogressivesteps.TheCentralFinancialAssistance(CFA)isonesuchtool,whichispoisedtoprovidesubsidiesfortheinstallationofrooftopsolarplantsintheresidentialsector.ManystateshavealsointroducednewpolicyinstrumentssuchasVirtualNetMetering(VNM),whichisofferedindifferentvariants,likeGroupVNM,CommunityVNMandbulkVNM.ChallengesTheIndianmarketremainsoneoftheworld’slargestmarkets,butasitwashithardin2020byCOVID-19,itisfacingseveralchallengesthatstandinthewayoftappingitsenormoussolarpotential:1.SanctityofContracts:StickingtopowercontractsisamajorroadblockhinderinggrowthofrenewablesinIndia.Therehasbeenanincreasingtrendinstatestowardscancellationorre-negotiationofawardedtenderbids(e.g.AndhraPradesh-PPArenegotiation,Punjab-tariffdiscountnegotiation,Gujarat-Dholeratendercancellation,UP-solarauctioncancellation),makingitdifficultforcompaniestoexecuteprojectsinIndia.Thisissue,ifleftunaddressed,cannegativelyaffecttheindustryatlarge.GlobalMarketOutlookForSolarPower2021-2025972.Manufacturing:Indianeedstohaveareliabledomesticmoduleandcellsupplychainthatcanhelpthecountrymeetitsdemandandambitioustargets.ThePLIschemecomesatanimportantjunctureinIndia’ssolarjourneyandwillgoalongwayintocreatinganecosystemfordomesticsolarmanufacturing.However,aspectslikeinterestsubventions,subsidizedlandandelectricityrateswillalsobegamechangersforpromotingmanufacturinginIndia.3.DistributedSolar:Distributedsolarisyettotakeoffinthecountrydespitemultiplemeasures.However,thesectoralsofacesseveralchallenges,suchas:littleconsumerawareness,lackofinnovativegovernmentpoliciesorattentionandlimitedsupportfromutilities.OutlookGiventheimpactofCOVID-19onthesolarmarket,weanticipateIndiatomoveonthefasttrackasof2022,whenthecountrywilladd2-digitGWlevelsperyearforthecomingyearsandreachthe100GWmarkin2024,whenover20GWareexpectedtobeinstalled.Authors:TussharSharma,SeniorAssociate,&SubrahmanyamPulipaka,ChiefExecutiveOfficer,NationalSolarEnergyFederationofIndia(NSEFI)4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-202598SOURCE:NSEFI.©SOLARPOWEREUROPE2021FIGUREGW6.3INDIANSOLARMARKETOUTLOOK020406080100120140Installedcapacity(GW)202220232024202520214651LowScenarioHighScenario56708810664821041258.SouthKoreaOverviewofPVdevelopmentsSouthKoreacontinueditssolarmarketgrowthin2020,whenitconnected4.1GWofnewPVsystemcapacitytothegrid,whichconstitutesanewinstallationrecordforthecountry.Thiscomparesto2.0GWaddedin2018and3.1GWin2019andtranslatesintoayear-on-yeargrowthof31%,butaslowdowncomparedtothe54%growthin2019.Intotal,SouthKoreainstalled15GWofsolarpowerbytheendofDecember.Inthefirstquarterof2021,thecountrydeployed1,017MWworthofnewPVsystems,whichisinlinewiththegrowthrateshowninQ1/2020.RenewablestargetsUnderits2017pastgovernmentplan“RE3020”,SouthKoreaisaimingfor20%ofitselectricitytocomefromrenewablesby2030.Everytwotofouryears,Koreapublishesanenergyplanthatactsasaroadmapforthecountry’spowerindustry.AttheendofDecember2020,the9theditionofitsBasicPlanforLong-termElectricitySupplyandDemandwasreleased,withdetailsforthepowersectorfor15yearsbetween2020and2034.AccordingtotheBasicPlan,thegenerationcapacityfromrenewablesisanticipatedtogrowto34%,fromaround15%attheendof2020.Thisisamuchhighertargetthanthe22%outlinedinthe2017released8thedition.The9thBasicPlanbuildsprimarilyonsolarandsecondlyonwind.By2030,itstrivestoreach34GWofsolarcapacityand18GWofwindcapacity,whichwouldrepresent90%ofthe57.9GWrenewablestarget.Itisverylikelythatthesenumberswillberevisedupwardagain.InOctober2020,SouthKorea’spresidentMoonmadeacommitmenttothenationalassemblytoreachcarbonneutralityby2050,shortlyafteritsbiggestlocaleconomicrivalsChinaandJapanhadannouncednetzerocarbongoals–firstChinaby2060,thenJapanby2050.DriversandChallenges:todayandtomorrowThemaindriverforover90%ofsolardemandinKorearemainstheRenewablePortfolioStandards(RPS)scheme,whichrequiresutilitieswithgenerationcapacitieslargerthan500MWgenerationcapacitytosupplycertainsharesoftheirpowerfromnewandrenewablepowersources:6%by2019and10%by2023.SouthKorea’sstronglyregulatedmarkethasbeenanobstacleforlowcostsolarinrecentyears,withthecountry’sKoreaElectricPowerCorporation(KEPCO)GlobalMarketOutlookForSolarPower2021-202599©SOLARPOWEREUROPE2021FIGUREGW8.1SOUTHKOREAANNUALSOLARPVMARKETSCENARIOS2021-2025GW012345674.83.46.13.220222023202420252016201720182019202020214.11%1%2%3%5%HistoricaldataLowScenarioHighScenarioMediumScenarioenjoyingamonopolyfortransmission,distributionandpurchaseofpower.ButasofJanuary2021,domesticconsumersareallowedtobuyelectricityfromrenewableenergyproducersthroughpowerpurchaseagreements(PPAs).WithSouthKoreabeinghometomanyinternationallyactivecorporateheavyweightsthatincreasinglyneedtotakecareabouttheirESGratings,thereisgiganticpotentialforPPA-basedsolarsystems.KEPCOinformedinJuly2021thatitremovedapriceclauseinstandardizedcontractsthatprohibitedrenewabledealstobesignedbelowaverageindustrialprices.ButitstilltooearlytoquantifyanyimpactsonsolardevelopmentashighT&Dcostsarestillabarrierforcompanies.ItisalsonotyetclearhowPPAswillbeappliedintheallocationprocessofKoranEmissionTradingSystem.SouthKoreahasitsownGreenNewDealprogram,withthegovernmenthavingcommittedUSD38billiontoboostrenewables.InhisOctoberspeechattheparliament,PresidentMoonsaidhewaslookingtocommitanadditionalUSD7billiontosupportgreeninitiatives.Thisincludesfinancialincentivesforlocalrenewableenergybusinesses,forprojectsandtoaccelerateR&Dforthenewgenerationofsolarcells,suchashigh-efficiencytandemsilicon-perovskitecells.SouthKorea’sHanwhaQCellswasthelargestnon-Chinesesolarmodulemanufactureron6thplaceoftheglobalrankingin2020.TheinitiativesalsoencompasssupportforbuildingEVcharginginfrastructure.TheKoreaPhotovoltaicSociety(KPVS)hashighlightedtheissuethatthecountry’s“mountainousterrainmakesitdifficulttofindareasforlargeutility-scalePVplants”.ForthatreasonSouthKorea’sgovernmentfocusesondistributedsolar,whichisaimedatproviding30%oftotalpowerby2040,upfrom12%in2017,andaninterimtargetof15%by2035.That’swhythereisalsoafocusonsmartmetersandEVinfrastructureinvestments,KPVSsaid.Atthesametime,thegovernmentislookingatcircumventingtheissuesoflandscarcitybylookingintoalternatives,primarilyfloatingsolarandoffshorewind.Koreaiscurrentlydevelopingtheworld’slargestfloatingPVplantwith2.1GWcapacityandannouncedinMarchthatitwillbuildanother2.1GWoffloatingPVcapacityby2030.Aspartofitsfocusondistributedenergy,SouthKoreahasbeenofferingincentivesandhassetsustainabilityrequirementsinseveralprograms,suchasitsHomeSubsidyProgram,itsBuildingSubsidyProgram,anditsPublicBuildingObligationProgram.ThecityofSeoul,forexample,hasagoaltoinstall1GWofsolaron1millionhomesandallpublicbuildingsby2022.AsSouthKoreahasbeenfacingdelayswithgridconnectionofrenewableenergysystemsduetomissingadequatetransmissioninfrastructure,severalgovernmentagencieshavebeentaskedtosolvetheseissues.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025100SouthChungcheong,SouthKorea.©InsungYoon/Unsplash.WhileSouthKorea’scoalandnuclearpowerwillfurtherexpandintheshortterm,peakingin2024,thecountry’splanistorelyonimportedgasasatransitionandbalancingfuel.Batterystorage,astrongdriverforsolar,onlyplaysanegligibleroleinthegovernment’splan.Itforeseesonlylessthan1%oftotalstoragecapacityby2034,despitethefactthatKorea-headquarteredLGisagloballeaderinthatfield.However,KPVSbelievesthatenergystoragewillplayanimportantroleinexpandingtheKoreanPVmarketinthefuture.OutlookWithCOVID-19havingcomparativelylittleimpactonthepubliclifeinSouthKorea,thesolarmarketcontinueditsgrowthpath,thoughatalowerratethantheyearbefore.Originally,thegovernmentwaslookingata2GWleveldeploymentperyearinits2030policyplan.Butthatwasalreadyprovenwaytooconservative,likethe20%renewablestargetsetfor2030.IfSouthKorea’sgovernmentisseriousaboutits2050carbonneutralitygoal,itwillhavetoincreaseitsrenewablestargetsagaininthe10thBasicPlan,inparticularasitstrivestophaseoutnotonlycoalbutalsonuclear,andifitdoesnotwanttogethighlydependentongasimportsintheinterim.TheKoreaAdvancedInstituteofScience&TechnologyrecommendedinMay2021thatthe20%RESby2030targetshouldberaisedto40%.However,SouthKorea’ssolarmarketisalsolikelytocontinueitsgrowthpathintheshortterm,duetovariousgovernmentinitiatives,andbecausetwotendersfor4GWofsolararescheduledfor2021.However,onefactormightbedifferent,astheKoreanMinistryofTrade,IndustryandEnergy(MOTIE)recentlyintroducedacarbonfootprintrequirementforsolarmodules.Itwillbeinterestingtobeseenhowthiswillaffectthesalessharesofmodulesuppliers.Authors:ChristopheLits&MichaelSchmela,SolarPowerEuropeBEFORETHEREISASOLARPANEL–THEREISWACKERCREATINGTOMORROW’SSOLUTIONS•LowCarbonFootprint•HighEfficiencyandDurability•MadeinEuropeWackerChemieAG,Hanns-Seidel-Platz4,81737Munich,Germany,Phone:+49896279-0,www.wacker.com/contact,www.wacker.com/solarFollowuson:9.BrazilOverviewIn2020,Brazilsurpassedthreenewmilestonesof5,6,and7GWoftotalcumulativeinstalledsolarcapacity,reaching7,747.2MWinsolarPVsystemsinoperation.BeforetheeffectsoftheCOVID-19pandemic,theBrazilianSolarPhotovoltaicEnergyAssociation(ABSOLAR)projectedatotalincreaseofmorethan4GWin2020.Thislevelwasnotfullyreached,asthesolarsegmentwasalsoimpactedbytheeffectsofthepandemicontheglobalandnationaleconomy.Still,Brazilinstalledmoresolarin2020thaneverbefore.DespiteCOVID-19,Brazilcontinuedtogrowatastrongpaceduring2020intermsofaddedsolarPVinstalledcapacityinthetwomainmarketsegmentsofthecountry:centralisedgeneration(large-scaleprojects,above5MW,commercialisedinenergyauctionsheldbythegovernmentandthroughdirectPPAsinthefreeelectricitymarket)anddistributedgeneration(smallandmedium-sizedprojects,equaltoorbelow5MW,viaanationalnet-meteringregulation).Installationsgrewtoarecord3,153MW,ofwhich2,535MWwasindistributedgenerationand618MWwasincentralisedgeneration.SolarPVTargetsTheBrazilianEnergyResearchOffice(EPE)forecastsinits10-YearEnergyPlan(PDE2030,publishedin2021)thatsolarPVcouldreachbetween24.7GW(PessimisticScenario)and43.2GW(OptimisticScenario)ofcumulativeinstalledcapacityby2030.Forcentralisedgeneration,PDE2030considersenergyauctionsaddinganaverageyearlycapacityof559.4MWbetween2021and2030.Fordistributedgeneration,itprojectsbetween16.3GWand34.7GWofcumulativeinstalledcapacityby2030.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025102FIGUREGW9BRAZILTOTALSOLARPVCAPACITYSCENARIOS2021-2030,BYABSOLAR051015202530354045Installedcapacity(GW)202120222023202420252026202720282029203024.722.720.718.616.614.612.911.810.48.643.239.135.131.027.022.919.616.813.710.3SOURCE:ABSOLAR,2021basedonofficialdatafromEPE,2021.©SOLARPOWEREUROPE2021DistributedPV-Scenario15.26.47.58.69.811.112.413.715.016.3CentralisedPV3.44.04.44.34.85.56.27.07.78.4Total=DG+CG-Scenario18.610.411.812.914.616.618.620.722.724.7DistributedPV-Scenario26.99.712.515.318.121.524.828.131.434.7Total=DG+CG-Scenario210.313.716.819.622.927.031.035.139.143.2Consideringbothcentralisedanddistributedgeneration,thePDE2030forecastsbetween1.8GWand3.7GWofsolarPVaddedcapacityonaverageperyear,between2021and2030.ABSOLARevaluatesthesenumbersasbelowexpectations,duetotheconservativeeconomicpremisesusedbythestudyforbothcentralisedanddistributedsolarPV.SolarPVTargetsIn2020,themarketgrowthofcentralisedsolarPVgenerationwasmainlybasedonthedeliveryofprojectscommercialisedunderthefederalgovernment’sNewEnergyAuction(LeilãodeEnergiaNova)heldin2017,aswellasdirectPPAscontractedintheFreeEnergyMarket(AmbientedeContrataçãoLivre).AsaresultoftheuncertaintiesduetotheCOVID-19pandemic,energyauctionsforlarge-scalepowerplantsscheduledtotakeplacein2020werepostponedbytheFederalGovernment.Nevertheless,newtendersremainscheduledfortheyears2021,2022,and2023,includingforsolarPVprojects.2020sawanincreaseof618MWincentralisedgeneration.TheincreasedcompetitivenessofsolarPVresultedinapipelineofmorethan17.9GWofgrantedprojectsinthecountry.Notalloftheseprojectshavealreadysignedcontracts,therefore,apartofthisisconsideredprospectivepipeline.ThisshowsagrowinginterestbymarketplayersinsolarPVelectricity,despitechallengesrelatedtobankabilityandgridconnectionbottlenecks,topicsthatABSOLARisaddressingwiththeparticipationofthesector.Indistributedgeneration,2020wasarecord-settingyear.TheincreasingcompetitivenessofsolarPVunderthenet-meteringregulationthroughoutthecountryledtocapacityadditionsof2,535MW,comparedto1,528MWinthepreviousyear,whichsignalsastrongimprovementforthesector.Todate,Brazilhasafullnationalnet-meteringprogramforprojectsupto5MW,includingbothlocalandvirtualnet-metering,aswellascommunitysolarmechanisms.ThisallowedforthedevelopmentofseveralinnovativebusinessmodelsforsolarPVdistributedgeneration,suchasdirectsales,solarcommunities,cooperatives,leasing,third-partyownership,andsolarasaservice.GlobalMarketOutlookForSolarPower2021-2025103SantaCruzdoSul(RS),Brazil.©AbsolarInthisregard,apublicconsultationassessingthebenefitsandcostsofdistributedgenerationinthemarketanditsimpactsinelectricitytariffstookplacein2019.ThesubjectisnowbeingdebatedbytheNationalCongress,whichplanstoestablishacomprehensivelegalframeworkfordistributedgenerationfromrenewableenergysourcesinBrazil.However,in2020,thisdebatewaspostponedastheNationalCongressturneditsfocustoimmediatedecisionsaboutthepandemic.Nevertheless,anewlegalframeworkfordistributedgenerationisunderdevelopmentandexpectedtobecomelawoverthecourseof2021.ABSOLAR’srecommendationtotheNationalCongressisthatthebenefitsofdistributedgenerationgreatlyoutweighandcompensateforanyimpactsorcosts.Potentialchangestothenet-meteringregulationareanimportantaspecttofollowcloselyinthismarketsegment,especiallywhentakingintoconsiderationtheroleofdistributedgenerationincontributingtoBrazil’seconomicrecoveryafterthepandemic,creatingnewinvestmentopportunitiesandjobsthroughoutthecountry.ABSOLARwillcontinuetodefendBrazil’ssolarPVsector,developingrecommendationstomakesolarPVadecisivetooltosupportthesustainableeconomicrecoveryofthecountry,duringandafterthepandemic.Authors:Dr.RodrigoLopesSauaia,CEO;Dr.RicardoLacerdaBaitelo,TechnicalandRegulatorySpecialist;ABSOLAR.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025104SãoGonçalosolarpark,Brazil.©EnelGreenPower10.NetherlandsLarge13.3GWprojectpipeline,strongincreaseofgridcongestionWithanaddedcapacityofmorethan3GWin2020andaprojectpipelinewithSDE+subsidy-awardedprojectsof13.3GW,theDutchmarketlooksverysunnydespitetheCOVID-19crisis.Thepipelineincludesbothrooftopcommercialandground-mountedprojects,withrooftopmakingupthelion’sshare.Themainchallengeisnowtoensurethecompletionofallprojects.Ingeneral,approximately70%oftheprojectsreachclosure,includingtimelygridconnections.ManyfavourableprojectdevelopmentareasintheNetherlandsareexperiencinggridcongestion,whichmeansnonewprojectscanbeconnectedtothegridinthenearfutureinthatarea.WearenowevenmoreupbeatontheDutchsolarmarketcomparedtoourlastyear’sforecast.In2021,theDutchsolarmarketwillgrowagainandisnowexpectedtoreachavolumeof3.8GW,and4.6GWin2025(seeFig.GW10).After2025thechancesofsolarwillstronglydependonelectricitydemanddevelopments.Electrificationeffortsinindustry,builtenvironmentandmobilitysectorsarenotyetinplace.Theprecentnegotiationsforanewgovernmentwillbedecisiveonthispoint,inrelationtonewEuropeanClimateTargetsandRecoveryPlans.FuturemarketdevelopmentTheDutchSolarEnergyAssociationHollandSolarispositiveaboutthemarketdevelopmentforthenextfouryears,ascanbeseeninourforecast(Fig.GW10).Themarketisdividedintotwoparts:Firstly,theresidentialandsmallbusinessesmarket(both<380A),andsecondly,thecommercialandutility-scalemarket.Commercial-scaleincludeslargerooftopprojects,whileutility-scalecoverssolarparks.GlobalMarketOutlookForSolarPower2021-2025105FIGUREGW10NETHERLANDSSOLARPVMARKETSCENARIOS2021-2025,BYHOLLANDSOLAR012345GWHistoricalresidentialHistorical(all)HistoricalcommercialHistoricalutility-scaleForecastresidentialForecastcommercialForecastutility-scale2022e2023e2024e2025e201520142013201620172018201920202021eSOURCE:HollandSolar.©SOLARPOWEREUROPE2021Newsystem-sizerecordsin2020LargesolarPVparksacrossthecountryhavestartedexceedingthe100MWsize.InSeptember2020,a110MWsolarparkwascompletedinVlagtwedde,intheprovinceofGroningeninthenorthofthecountry.Theconstructionofalargersolarparkof147MWhasbegunintheprovinceFlevoland.Anincreasingnumberoffloatingsolarprojectswerealsocompletedin2020,mostlysituatedonsandpitsandwaterdeposits.Thereisincreasedinterestinmultifunctionaluseofspace,likesolarcarports.Soontheconstructionofa35MWsolarpanelcarportwillbefinishedonafestivalsiteinDronten.Currently,thecountry’slargestrooftopproject,installedonawarehouseinVenlo,hasacapacityof18MW.However,anewrecordroofisunderconstructionwitha140000solarpanelscurrentlybeinginstalledatVerbruggeTerminalsinTerneuzen.Marketsegmentsin2020wereallequallysuccessfulincontributingtothetotalannualaddedvolume:residential(35%share),commercialrooftop(36%share)andutilitysize(29%share).Theseestimatesarecalculatedbasedondataforthecompletionof2020projectsasfarasfigureswereavailable.Despitetheexpectationthattheresidentialsectorwouldstabiliseatalevelof800MWperyear,therewasasurprisingincreaseofaddedvalueinthismarketsegmentto1,100MWin2020.DuetotheCOVID-19pandemicconsumersshowedmoreinterestininvestinginsolar.Andduetoextranationalcampaignsandlocalpolicies,wecanexpecttheyearlyaddedresidentialvolumetostayonthislevelforthecomingyears.ResidentialsolarwillremainanimportantmarketsegmentfortheNetherlands.DutchpolicyandrenewableenergytargetsTheNetherlandshasnotmetitsEU2020targetsfromnationalsources,whichwouldhaverequired14%ofthecountry’stotalenergymixtocomefromrenewables.Instead,renewablesaccountfor11%.ThegapiscompensatedforbyastatisticaltransferofDanishwind.Nevertheless,thereisanimpressivepipelineofprojectsbothinsolarandwind,bothoffshoreandonshore.TheEnergyAgreement’s16%renewableenergytargetfor2023isthereforeprojectedtobeachieved,withatleast16.6%.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-20251067.5MWTransberglandfill,Dordrecht,Netherlands.©TPSolarRegionalEnergyStrategiesAsagreedintheClimateAgreement,clustersofmunicipalitiespublishedtheirconceptRegionalEnergyStrategieswithplansforwindandsolarcapacity.LocalspatialplanningandpermittingprocedureswillbebasedontheseRegionalEnergyStrategies.Thesecondstageofthisprocessrequireslocalgovernmentstospecifydedicatedareasofinterestforthedevelopmentofrenewableenergyonland.Thesededicatedareasincludeapossibledesignationforsolarorwindenergyaswellasextraplannedgridcapacity.Fromthesestrategiesitbecomesapparentthatrooftopsolarsystemsarestronglyfavouredoverground-mountedsolarandonshorewindturbines.Theexpectedground-mountedcapacitywilllargelybedevelopedaroundinfrastructuralhubssuchashighwaysandrailroads.Theground-mountedprojectshavetobedevelopedwithover-all50%localownership.TheexpectationisthattheselocalpoliciesbecomemoreprevalentintheDutchsolarsectorandthatrooftopsolarwillhaveextraincentives.Thisalsomeansthataccesstolandwillbemorerestricted.Inordertomeetlocalrequirements,acodeofconductonhowtobestintegratesolarwiththenaturalandsocialenvironmentisinforcewiththesupportofmanyNGOsandstakeholders,suchasHollandSolar.DriversforsolargrowthTheresidentialsolarmarkethascontinuedtobedrivenbynet-metering.Thereisnolimitationorchargefornet-delivery.However,thiswillchange.Anewlawhasbeenproposedbythepreviousgovernment,whichstipulatesthatasof2023,therighttousenet-meteringwillgraduallydecreaseby9%everyyear,upuntil2031atwhichpointnet-meteringwillnolongerexistintheNetherlands.Thatbeingsaid,mostpoliticalpartiesofinfluenceareagainstthisproposal,astheyfearthismightimpedethedevelopmentofresidentialsolarenergy.Thiscouldleadtoamendmentstotheproposedlaw,andmostlikelyimplementationbeingdeferredbeyond2023.Asofautumn2020,itwasagreedthattheSDE+scheme,whichwillremaininplaceuntil2025,willexpanditsscope.ItsscopenowincludesotherCO2reductionprojectssuchasCCS.Therankingintheamendedscheme(nowcalledSDE++)isnowbasedoneurosperkTCO2avoided.ThemaximumSDE++contributionperproducedkWhhasgraduallydecreasedoverthepastfewyears,includingtheSDE++roundintheautumnof2021.Achangeinthereferenceenergypriceshasledtosolarbeingconsideredmore‘subsidyintensive’ascomparedtoreachingthesameamountofCO2reductionbyanothertechnology.ThiscreatesariskforsolarasCCSGlobalMarketOutlookForSolarPower2021-202510735MWsolarCarport,Dronten,Netherlands.©SolarFieldsandCCUprojectswillprimarilyreceivesubsidiesandonlytheremainsofthefundswillbedistributedamongthesolarprojectsthathaverequestedSDE++subsidy.However,totalbudgetperroundallowsnewsuccessesforsolar.Andindeed,accordingtotheJune2021publishedpreliminaryresultsofthefirstSDE++round,solarPVwasthelargestwinnerwith3,426projectsrepresenting3.54GWofthetotalawardednumberof3,486projectsand4.41GW.TheexpectationisthatsolarenergyprojectscanbedevelopedwithoutanyincentivesbasedonPPAcontractsby2025atthelatest.Aguaranteefromthegovernmentcouldbeimplementedafter2025,protectingmarketpartiesagainststrongvariationsinelectricityprice.However,thiswilldependontheoutcomeanewgovernmentagreement.ChallengesOneofthemainchallengesforsolarintheNetherlandshasn’tchanged–it’saboutsecuringtimelygridconnectionsandgettingenoughtransport.Inagrowingnumberofareasthereissimplyalackofgridcapacity.However,thereservecapacityintheDutchgridswillbeputintogeneralusebythegridoperatorsthisyear.Thiswilladdasignificantamountofextracapacity.Cablepoolingwhichcombinessolarandwindprojectwasrecentlylegallyaccepted,whichallowsprojectstoutiliseasharedconnectiontothegrid.Moreover,themarketagreeduponamaximumofconnectioncapacityof70%ofinstalledpanelcapacity.Thishelpstheefficientuseofgridcapacityandplanning.Also,thereisaninitiativetoincludebatteryprojectsinadditiontoexistingsolarprojects,tobeeligibleforSDE++,hopefullyfrom2022onwards.Yetallthesemeasureswillnotsolveallcongestionissues.Theexpectationisthatgettinggridconnectionandtransportwillbemoredifficultinthenearfuture.ThenewEnergyLaw,plannedtobeinforcein2022,willprovidenewrulesformarketpartiesandgridoperators.Accesstothegridwillbesubjecttomoreexplicittermsandconditionsunderthenewlaw.Anotherchallengethecountryfacesistheavailabilityofland,especiallyforutility-scaleprojects,aswellthechallengeofgainingsocialacceptancewhenitcomestousingagriculturallandforsolarenergyprojects.Governmentpolicyistopreferrooftopsoverfieldsforsolarinstallations.PoliticalpreferenceshaveclearlyshiftedsincetheparliamentaryelectionsinMarch2021,andfuturepossibilitiesfornewground-mountedsolarparksmaybeatriskinthecomingyears.Finally,thesectorhasputsignificanteffortintodevelopingacodeofconductforthedevelopmentofcommercialandutilityscalerooftopprojects.Severalfireincidentshavecausedinsurancecompaniestoincreasetheirfeesortorefuseinsuringbuildings.Withanewlydevelopedcodeofconductthesectorasawholeshowsitscontinuedcommitmenttosafe,greenrenewableenergy.Authors:PeterMolengraaf,President;AmelieVeenstra,PolicyDirector,HollandSolar.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-202510811.SpainThistime,SpainisheretostayOverviewofPVdevelopmentsDespitetheupsanddownsofthepast,solarenergyhasenteredanewerainSpain.Aftertoomanyyearswithlowinstallationfigures,in2019Spainsaw4.7GWofnewcapacityintroduced,positioningthecountryasthesixthlargestsolarmarketintheworldandtheEuropeanleader.In2020,around3.5GWwasadded,whichmeantaspotclosetotheglobaltop10andrankedsecondinEurope,behindonlyGermany,confirmingthestrengthofthepreviousyear’sgrowth.Innationalterms,2019and2020were,respectively,thebestandsecond-bestyearforsolarPVinthehistoryofSpain.SolarPVtargetsTheseGW-scalefiguresareconsistentwiththetargetscenariosetoutintheSpanishNationalEnergyandClimatePlan(NECP),whichforeseessolarPVcapacityashighas39.2GWby2030,asignificantrisefromaround12.5GWtoday.ThisprojectioniswhattheSpanishGovernmentconsidersnecessarytomeetitsREStargetsoftherecentSpanishClimateChangeAct,approvedinMay2021.Thelawfixedadualtargetforrenewablesby2030:42%shareinfinalenergyconsumption,and74%shareinelectricitygeneration.Italsoincludesaclausetoreview(onlyupwards)thetargetsin2023.ButtheSpanishsolarsectorisnotonlydrivenbyambitiousenergypolicytargets.Installedplantsinthelasttwoyearsshowthatthereisabusinesssectorabletodeploylargefiguresofnewcapacity,suchasthoserequiredtomeettheobjectivesoftheNECP.Utility-scalevsrooftopsolardevelopmentandplansInground-mountedplants,theeconomiccompetitivenessofsolarPV,theterrainavailability,thegoodresources,andtheknow-howofSpanishdevelopersareattractingtheinterestofmany.TheliquidityofthecapitalmarketsandthelimitedinvestmentoptionsexplainwhysomanyactorsseesolarenergyinSpainasanoptimalinvestmentopportunity.AccordingtoIHSMarkit,Spainisthefifthmostinterestingmarketintheworldtoinvestinrenewables,andground-mountedsolarplaysabigrolehere.Infact,ground-mountedsolarwasthetechnologywiththelargestinstallationsharein2020thanksto2.8GWofnewcapacity.Itshouldbenotedthatallofthesesolarplantswereinstalledwithoutanytypeofpublicaidorregulatoryincentivescheme,makingSpaintheleadingPPAmarketinEurope,accordingtoRE-Source.GlobalMarketOutlookForSolarPower2021-202510950MW,Solanilla,Trujillo,Spain.©FotowatioRenewableVenturesIntermsofsolarPVrooftops,thesituationisabitdifferent.Theexistingregulatoryframework(thateliminatedtheSuntaxasthemainbarrierforthissegmentinthepast)wascompletedonlyinearly2020,whichexplainswhyself-consumptioninSpainisstillfarbelowthelevelofitsneighboringcountrieswithhugeuntappedpotential.However,installedpowerofsolarrooftopsincreasedby715MWin2020,a30%increasecomparedtothepreviousyear,alsoshowingtheresilienceofthissegmenttotheimpactofCOVID-19.ChallengesRegardingthechallengesofthemarket,itisclearthattheinterestofmanyplayersindevelopingsolarplantsinSpaincomesataprice.Sofar,around100GWofnetworkaccesspermitshavebeenalreadygrantedtomultiplesolarplantdevelopersthatrushtoadvancewiththeirpermittingandgettoaready-to-buildstatustooutperformtheircompetitors.Thishighinterestandcompetenceamongdevelopershasresultedinamassivevolumeofprojectsadvancingtheirpermitting(nearlythreetimestheNECPtargets),puttingpressureontheadministration,whichisstrugglingtoprocessalltheauthorisations.TherushalsoseemstotriggeraNIMBY(NotInMyBackyard)effectwithadministrationsonthelocallevelinrecentmonths.ForthesolarPVrooftopsegment,themainchallengeisthelongandnon-homogeneousauthorisationprocessesatthelocallevelasmanymunicipalitiesstillrequireconstructionworklicensestobuildthePVsystems.OutlookUNEFexpectsthatgrowthwillcontinuein2021.Intheground-mountedsegmentuptoMay2021,installedcapacityisalreadyabove700MW,afigurethatwillreacharound3GWbytheendoftheyear,accordingtoourestimates.TheJanuary2021heldrenewableauctionsawarded2GWtosolar(tobecommissionedbeforeFebruary2023),andnewauctionswillbeheldeveryyearwithatleast1.8GWreservedforsolar.Ontopoftheauction-drivencapacity,thePPAsegmentwillcontinuetoperformwellin2021.Intermsofrooftopsolar,positivegrowthisalsoexpected,with2021likelytoexceed2020’srecord-breakingfigures.Forthecomingyears,growthwillaccelerateduetotheincentiveprogramforself-consumptionincludedinthenationalrecoveryplanthatcouldbeabletodeploy3GWofnewfacilities.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025110SOURCE:UNEF.©SOLARPOWEREUROPE2021FIGUREGW11.1SPAINANNUALSOLARPVMARKETSCENARIO2021-2025,BYUNEF01,0002,0003,0004,0005,0006,000NewPVcapacity(MWDC)CommercialResidentialIndustrialUtility-scale202220232024202520213,8005,5004,5004,0003,800Inconclusion,unlikeforthefirstsolarboomadecadeago,thistimeSpainisheretostay.Thefiguresofnewinstalledcapacitywillremainatthislevelfortheupcomingyears.Thecompetitivenessoftheground-mountedsegmentandtheboomofrooftopsolarwillcontinuetokeeptheSpanishsolarsectorintheworld’stop10.ToensurethisdevelopmentisnothinderedbyNIMBYopposition,itiskeythatsolardevelopersapplythebestavailableESGmethodsforsocialandenvironmentalintegrationofutility-scalePVplants.Fortunately,manycompaniesarealreadybuildingsolarplantsinSpainwithafocusonimprovingthesocioeconomicconditionsoflocalcommunitiesandthebiodiversityoftheterraininwhichtheyareinstalledandbeyond;oneofthem,the300MWTalayuelaplantfromStatkraftwasamongthethreefinalistsofSolarPowerEurope’s1stSustainabilityAward2021.Authors:JoséDonoso,AlejandroLabanda,UniónEspañolaFotovoltaica(UNEF).GlobalMarketOutlookForSolarPower2021-2025111WesupportPVsystemsWesupportphotovoltaicsystemsforanyroofaroundtheworldsince2004.Easy,fastandsafe.k2-systems.comINNOVATIVESOLUTIONSFORPV-MOUNTINGINSTALLATIONS12.PolandOverviewofPVdevelopmentsSolarPVisthefastestgrowingenergysectorinPoland,and2020wasarecordyearforsolarinthecountry.AccordingtothedataofthePolishtransmissionsystemoperator(PolskieSieciElektroenergetyczne),installedPVcapacityattheendof2020was3,936MW,whichmeansanincreaseby2,463MWyear-on-year,amountingto200%growthcomparedto2019.WealsoseeveryhighsocialacceptanceforPVtechnologyandnomajorcontroversythatsometimesaccompaniesothersources.Theresearchconductedin2020bytheMarketingResearchCentreIndicator,commissionedbythePolishPhotovoltaicAssociation,showsthat90%ofrespondentswouldaccepttheconstructionofaPVfarmintheirneighborhood.Solar/REtargetsAccordingtothePolishgovernment’splans,in2040morethanhalfoftheinstalledcapacitywillbefromzero-emissionsources.IntermsofsolarPVcapacity,therewillbeanincreaseininstalledcapacitytoapproximately5–7GWin2030,andbetween10–16GWin2040.Thesefigureswillmostlikelybeachievedmuchsooner.DriversforsolargrowthInPolandthereissignificanttalkabouttheneedtodevelopsolarenergyinthecontextofhighsummerpeaksintheenergysystem,whicharetheresultoftwofactors:morefrequentheatwaves,whichresultsinincreasedenergyconsumptionduetoairconditioning.Recurringdroughtsreduceenergyproductioninconventionalpowerplants.Onlysolarenergycanpreventtheriskofblackoutsduringsummerloadpeaks.SolarPVproducesmostenergyinthemomentsofthehighestsunexposurewhenairconditioningconsumesmostelectricity.Inthemicro-installationsector,co-financingprogramsandpreferentialsettlementmethodsconstitutethemaindriversforgrowth.However,thissituationwillbevalidonlyuntiltheendof2021,whenthelegislativeframeworkforsmall-scalesystemswillchange.Moreandmoremedium-sizedPVinstallationsarebeingbuiltnexttofactories,andontheroofsofofficebuildingsorwarehouses,withoutanysupport;thecostsofproducingenergyfromsuchinstallationsarealreadylowerthanthecostsofpurchasingelectricityfromthegrid.Utility-scalevs.distributed&rooftopsolardevelopmentandplansThePolishInstituteofRenewableEnergyprovidesanoverviewofPVinstallationsinthecountryattheendof2020.Totalcapacityofmicro-installations4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025112SOURCE:PSF,basedonInstituteofRenewableEnergy.©SOLARPOWEREUROPE2021FIGUREGW12.1POLANDTOTALSOLARPVCAPACITYSEGMENTS2020,BYPSFRESauctions:750MW;19%>500kWoutsideRESauctions:75MW;2%50-500kW:65MW;2%<50kW:3,022MW;77%(installationswithatotalinstalledcapacitylessthan50kW)wasbyfarthelargest,amountingto3,022MW.Smallinstallations,withacapacityofbetween50kWand500kW,hadaminorshareofthecake,withatotalcapacityof65MW.SolarPVinstallationswithacapacityabove500kW,createdunderthesystemofcertificatesoforiginoroutsidetheauctionsupportscheme,contributedwith75MW.Finally,large-scalesystemsbuiltundertheRESauctionhadatotalinstalledcapacityof750MW.Bytheendof2021,weexpectasharpincreaseincapacityintermsofmicro-installations,withprosumershurryingtoinstallby2022when,inaccordancewiththeamendmenttotheEnergyLaw,thesupportsystemwillbecomelessfavorableforownersofmicro-installations.Thediscountsystem,whichhascontributedtothegrowthofhomeinvestmentsinPVsystems,willdisappearfrom2022onwards,whenitwillonlybepossibletosellsurplusenergy.Prosumerswhoinstallbeforethisdatewillremainundertheoldsystemforanother15years.Asitstandsnow,theprosumergivesoffsurplusenergyduringtheday,andintheevening(whentheinstallationnolongerproducesenergy)hasthepossibilitytoreceive80%ofthepreviouslygivenenergy.Thenewsystemchangesthis,wheresurpluseswillbesoldbytheprosumerduringthedayandboughtintheevening.Sincesellingonlineistwiceascheapasbuying,prosumersmayfeelthechangestobeadisadvantage.ChallengesThemostpressingchallengeforsolarenergyandtheentirerenewableenergyindustryisthelackofnotificationofregulationsontheextensionoftheauctionsupportsystemforREStechnologiesafter2021.Thegovernmenthaspresenteditsproposaltoextendthesupport,butitrequiresthenotificationoftheEuropeanCommission.Industryorganisationshavealsobeensoundingthealarmformanyyearsabouttheneedtomoderniseandexpandthegrids.Withouttheseimprovements,furtherdevelopmentofrenewableenergysourcesinPolandwillbethreatened,whichwillnegativelyimpacttheenergysecurityofthecountry,especiallyatthelocallevel.OutlookThechangeoftheprosumerbillingmodeltoalessfavorableone,motivatedbythegovernmentwithrestrictionsonthedistributionnetwork,willmostlikelyresultinanoticeableslowdowninthegrowthofnewcapacitiesinthesolarPVsegment.ThecurrentpaceofdevelopmentofsolarinPolandcouldbesustainedbynewinvestmentsinthesegmentofsmall-andmedium-sizedenterprises.TheconditionistheliberalisationoftheregulationsontheconstructionofenergynetworksandenablingtheconstructionofdirectlinesconnectingPVinstallationwiththeenduser.Currently,theconstructionofsuchdirectlinesispracticallyimpossibleduetothelackofappropriateregulations.ItisnecessarytoadaptthePolishlawtothepossibilityofthedirectsaleofelectricity(viaPPAs),includingusingadirectline.However,withnearly4GWinstalledbytheendof2020,thecurrent5-7GWby2030targetofthegovernmentwillbemetinanycase.Butthattargetwillhavetobechangedupwardsanywaytomeettheupcomingmoreambitious2030targetsoftheEuropeanCommission.Author:PaulinaWojciechowska,CommunicationOfficer,PolskieStowarzyszenieFotowoltaiki(PSF)GlobalMarketOutlookForSolarPower2021-202511364.6MW,Witnica,Poland.©FotowatioRenewableVentures13.TaiwanOverviewofPVdevelopmentsTaiwanreachedtheGW-levelforthefirsttimein2019,adding1.41GW,whichisequaltoanannualgrowthof45%andresultsinatotalcumulativecapacityabove4GW.2020wasexpectedtofollowasimilardevelopment.TheBureauofEnergy,MinistryofEconomicAffairs(MOEA)wastargeting2.2GWofnewsolardeployment,targetingatotalof6.5GW.ButCOVID-19tookitstoll.Inthefirstfivemonthsof2020,only410MWofsolarcapacitywasadded.Whilemarketdemandinthesecondhalfoftheyearwasmuchbetter,itwasnotenoughtocatchupandmeetthegovernment’s2020annualtarget.At1.67GW,theseweremissedby24%.Whenlookingatthecumulativecapacitytarget,themisswasalittlelower.5.8GWofPVcapacitydeployedinTaiwanattheendof2020meanta10%miss.Ontheonehand,TaiwantriedtosupportitsPVindustrybyextendingPVprojectcompletiondeadlinesinresponsetothepandemic.Ontheotherhand,theCouncilofAgricultureimplementedrestrictionsonland-use,whichmadethejobmuchmoredifficultforPVprojectdevelopers.AsofJuly2020,thenewregimespecifiesthatsolarprojectscovering2-30hectaresofagriculturallandmustbeapprovedbythecouncilratherthanthelocalgovernment.Moreover,PVprojectscannotbebuiltonagriculturalandhillsidelandsmallerthan2ha.In2021,severaldecisionsweremadetohelpthesolarsector.InJune,theTaiwaneseMinistryofEconomicAffairsdecidedtoleavethefeed-in-tariffsforPVinstallationsunchanged.Theywereinitiallyplannedtobeloweredfrom13.6-20.4USDcentsto13.4-20.3USDcents.ThedecisionwastakentohelpthesolarsectorrecoverfromthedelayscausedbyCOVID-19.Theministryisalsograntingathree-monthgraceperiodforthecompletionofprojectsunderdevelopment.SolarPVtargetsanddriversThegovernmentstatedinJanuary2021thatitsprevious6.5GWtargetwouldbereachedinthefirstquarterof2021.Atthesametime,MOEAhasalsosetan8.75GWinstalledPVgoalfor2021,translatingintonewinstallationsequalto2.2GWbytheendofthisyear.DespitetheCOVID-19blip,thegovernmentmaintainsits20GWsolartargetby2025,with3GWofrooftopand17GWofground-mountedcapacity.Ifthe8.75GWareinstalledasplannedbytheendoftheyear,Taiwanwillhavetodeploy2.8GWonaverageforthecoming4years.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025114©SOLARPOWEREUROPE2021FIGUREGW13.1TAIWANANNUALSOLARPVMARKETSCENARIOS2021-2025GW012342.82.13.41.82022202320242025201620172018201920202021-3%55%7%4%10%1.7HistoricaldataLowScenarioHighScenarioMediumScenarioChallengesandperspectivesforsolargrowthLandavailabilityremainstheprimarylimitingfactortosolardeploymentinTaiwan.Itisoneofthemostdenselypopulatedcountriesintheworldandwithtwothirdsoftheisland’slandconstitutedbymountainousareas.Therefore,solardevelopersarefacinggrowingchallengestofindsuitablelocationsfortheirprojects.Moreover,thedeploymentofground-mountedprojectsishinderedbyhurdlesinpurchasingland.Often,large-scaleprojectsspanoverseverallandowners,whichmakesnegotiationsforlandacquisitionverychallengingandlengthy.Thereisalsosomeresistanceintheagriculturalsector.ThenewrulesintroducedinJuly2020bytheCouncilofAgriculturearestricterthaninthepast.ThislimitslandavailabilityfurtherandrisksslowingdownthedeploymentofsolarPV.ThesituationisworsenedbytheNovember2020decisionoftheMinistryofFinancetostopgivingpermitsforsolarsystemdevelopmentinecologicallysensitiveareasintheCountyofChiayiandthecityofTainan.PreviousauthorisationsforPVprojectsgrantedinthoseareaswillberevoked.Nevertheless,projectdevelopersinTaiwanhavetakeninterestinsettinguplargescalegroundmountedsolarpowerplants.ThelocalsolarcellandmoduleplayerUREhassecuredtwobigdealsinthecountry,onefora193MWprojectin2019andanotherfor120MWofbifacialcapacityin2020.Totacklethespaceissuesseveralagenciesarelookingintowaysandtechnologiestoaddressthelandissues,forexamplethroughinnovativePVinstallationssuchasfacilities’roof,aquavoltaics,usingheavilypollutedlands,etc.RooftopsolarisnowonefocusofTaiwan’sgovernment.The2021editionoftheRenewableEnergyLawrequireslargepoweruserstosourcesomesharedoftheirpowerfromrenewables.ThislegislationisanticipatedtoresultinmanycorporatesstartingtoopteitherforonsitesolarsystemsoroffsitesolarPPAs.Inanycase,Taiwanwillhavetofindsolutionsforaddingmuchmoresolarinthelongrun.UnderpressurefromannouncementsintheEuropeanUnion,UnitedStatesanditscloseneighbourChinatoturnclimateneutral,itspresidentreportedlyemphasisedduringEarthDaythatthecountrycannotfallbehindtheinternationaltrend.Thegovernmenthasstartedtodiscusspotentialstrategiestowardsnet-zeroemissionsby2050.Sofar,thecountry,whichreliedoncoalfor45%ofitspowerproductionin2020,hasbeentargetingtohalveemissionsfrom2005to2050.Authors:ChristopheLits,RaffaeleRossi,&MichaelSchmela,SolarPowerEuropeGlobalMarketOutlookForSolarPower2021-20251152MW,TaipeiEnergyHill,Taiwan.©AndersJacobsen/Unsplash14.MexicoOverviewofPVdevelopmentsIn2020,installedsolarPVcapacityinMexicoincreasedby1.87GW,exceedingthesolarGWmarkforthethirdyearinarow.Whilethisisa10%decreasecomparedtothe2.1GWaddedin2019,itconstitutesa40%growthintermsofcumulativeinstallations.Totalcapacityreached6.5GW.Thisisabout10timesmorethantheinstalledcapacityin2017.Outofthetotalinstalledcapacity,utility-scalePVrepresents79%(5.15GW)anddistributedsolarPV21%(1.39GW).Utility-scalePVadded1.5GWofcapacityin2020,slightlylessthan2019and2018(1.77and1.71GWrespectively).Incontrast,distributedsolarPVsawanincreaseof365MW,ahighervaluethan2019and2018(335and236MWrespectively).Lookingatthewholeelectricitysystem,utility-scalePVcapacityrepresents6.2%oftotalinstalledcapacity(83.1GW),while65%correspondstofossil-fuel-basedtechnologies.Intermsofpowergeneration,fossil-fuel-basedtechnologiesprovided75%andsolarPV5.7%ofthetotalelectricitygenerationin2020.Aslightdecreaseinoverallelectricityconsumptionoccurredin2020duetotheCOVID-19pandemic.REtargetsIn2015,cleanenergytargetswereestablishedintheEnergyTransitionAct(LTE)andTransitionStrategiesasfollows:cleanelectricitygenerationminimumsharewassetfor25%by2018,30%by2021,35%by2024,andindicativetargetsof40%by2035,and50%by2050wereestablished.Cleanenergysourcesweredefinedaswind,solar,geothermal,hydroelectric,andotherformsofrenewableenergy,plusnuclear,certainbiofuels,andefficientcogeneration.Inordertoreachthesegoals,thepowersectorreformcreatedtheCleanEnergyCertificates(CEC),whicharepermanenttitlesthatcertifyagivensourceofpowergenerationasbeingacleansource.ThepurposeofCECwastoencouragetheinstallationofnewcleanenergygenerationprojects.Itiswellknownthatrecentchangesinenergypolicymightresultinnon-compliancewithMexico’scommittedcleanenergygoals.TheMinistryofEnergyhasconsidereddistributedsolarPVthekeycomponenttoreachthecleanenergygoalsofMexico.AccordingtotheDevelopmentProgramfortheNationalElectricSystem(PRODESEN),installedcapacityindistributedsolarPVcouldreachnearly6GWin2025.Incontrast,theMinistryofEnergyestimatesthatthe2021-2025increaseinutility-scalePVcapacitywillbearound4.76GW.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025116SOURCE:ASOLMEX.©SOLARPOWEREUROPE2021FIGUREGW14.1MEXICOTOTALSOLARPVCAPACITY2012-2020,BYASOLMEX01,0002,0003,0004,0005,0006,0007,000MWDistributedsolarPVcapacityUtility-scalePVcapacity2013201420152016201720182019202020121,3885,149ChallengesBefore2013,electricitysupplyinMexicowascarriedoutunderaverticallyintegratedmonopolyscheme,operatedandownedbytheStatethroughtheFederalElectricityCommission(CFE).Aftertheenergyreformof2013,whichincludedtheunbundlingandrestructuringofCFE,acompetitiveelectricitymarketwasintroducedforgenerationandsupply.Openaccesstotransmissionanddistributiongridsbymarketparticipantswasakeycomponentofthisreform.Privateinvestmentsingenerationweremainlypromotedbymeansoflong-termenergyauctionsheldannuallybytheIndependentSystemOperator.CFEBasicSupplycouldonlyacquireelectricitythroughtheseauctionsinordertoguaranteethelowestpossibleprices.Long-termenergyauctionswerepartofthegovernmenteffortsnotonlytoincreasethegenerationbuttoacceleratethecleanenergytransition.From2015to2017,threelong-termauctionssecured4.65GWofnewutility-scalePVcapacity.Approximately80%ofthoseprojectsstartedcommercialoperationbeforetheendof2020.SinceDecember2018,PresidentLopezObradorhasdrasticallychangedthedirectionofpolicyforMexico’selectricitysector,promotingaverticalintegrationofthestate-ownedcompanyCFE,andseekingtoerodekeyaspectsofthemarket-orientedenergyreform.Differentregulatorychangeshavebeenimplemented.TheseprovisionsaimtoeliminatetheeconomicdispatchofelectricitybygivingprioritytoCFEplants,aimtoreduceopenaccesstothegrid,aimtoeliminatelong-termauctionsandaimtoallowtheEnergyRegulatoryCommission(CRE)todenypermitsbasedondiscretionaryreliabilitycriteria.ManyoftheregulatoryandpolicychangeshavebeenchallengedincourtbymarketparticipantsandenvironmentalNGOs.However,regardlessofthelegaloutcome,regulatorychangeshaveerodedtheinvestmentenvironmentinMexicoforrenewableenergy.AnadditionalchallengeforrenewabledeploymentinMexicoisconstitutedbytheelectricitygrid.Between2017and2020,thewindandsolarelectricitygenerationsharejumpedfromjust3.6%to10.6%.Utility-scalePVgenerationaloneincreasedfrom0.35TWhto13.53TWh.ThischangeinMexico’selectricitygenerationmixhasshowntheurgentneedforsignificantinvestmentstoupgradeandexpandthetransmissionanddistributionnetworksinordertoincreasetheflexibilityandreliabilityofthesystem.Itmighttakeyearsfornewinvestmentsinthegridtobecarriedout.Therefore,newtechnologiessuchaselectricitystoragecouldplayakeyroleinincreasingflexibilityintheenergysectorinthenearfuture.GlobalMarketOutlookForSolarPower2021-2025117754MW,Villanueva,Mexico.©EnelGreenPowerOutlookRegulatorychangeshaveaffectedtheinvestmentenvironmentforutility-scalePVinMexico,backtrackingonthelastdecadeofprogressintheenergytransitionandreversing2013’slandmarkenergymarketliberalisation.Underthecurrentpolicyandmarketconditions,annualinstalledcapacityfromthelarge-scalesegmentisexpectedtostaybelow1GWintheperiod2022-2025.Bycontrast,investorsindistributedsolarPVcanbemoreoptimistic,sincegovernment’spolicychangeshavenotmodifieditslegalframeworkandinstalledcapacityhasbeengrowingatadouble-digitrateoverthelastdecade.However,thissegmentstillneedsincreasingfundingmechanismsanddevelopinganationalcertificationsystemforinstallers.Between2021and2025,weforecast2.2-3.6GWofrooftopsolar,dependingonthesector’ssuccessinovercomingthesechallenges.Author:JaimePérezdeLaborda,PresidentoftheMexicanAssociationofSolarEnergy(Asolmex).4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025118SOURCE:ASOLMEX.©SOLARPOWEREUROPE2021FIGUREGW14.2MEXICOUTILITY-SCALESOLARPVCAPACITYSCENARIOS2021-2025,BYASOLMEX02,0004,0006,0008,00010,00012,000MWUtility-scalePV(historical)Utility-scalePV(baselinescenario)2017201820192020202120222023202420257,0267,9888,9509,91110,873GlobalMarketOutlookForSolarPower2021-2025119SOURCE:ASOLMEX.©SOLARPOWEREUROPE2021FIGUREGW14.3MEXICODISTRIBUTEDSOLARPVCAPACITYSCENARIO2021-2025,BYASOLMEX01,0002,0003,0004,0005,0006,000MWDistributedsolarPV(historical)DistributedsolarPV(baselinescenario)DistributedsolarPV(optimisticscenario)201320142015201620172018201920202021202220232024202520121,9451,7182,6112,0663,3442,4904,1432,9905,0093,56615.UkraineOverviewofPVdevelopmentsIntensivesolarenergydevelopmentinUkrainebeganonlyrecently,in2018-2019,despitethefactthatafeed-intariff(FIT)forrenewableenergysupportschemeswasinplacesince2010.Veryfewsolarsystemswereinstalledinthecountrybytheendof2016,withacumulativecapacityof548MW.In2018,solarPVcapacityreached1,545MWintotal.Thelargestgrowthtookplacein2019,whenthetotalinstalledcapacityincreased3.5timescomparedto2018.Utility-scalePVmadeupthelion’sshareofthisdeployment,with3.53GWinstalledyear-on-year.Inmid-2020,thegovernmentimplementedretroactiveobligatoryFITcutsforallexistingsolarpowerplants.Moreover,systemownersexperiencedunstablepaybackundertheFITscheme.Currently,35%arestillnotpaidfor2020,andthedebtfor2021isaround15%.Asaresult,thedevelopmentofnewREcapacitiesdecreasedsignificantlyin2020and2021.Lastyear,theUkrainiansolarsectoradded1,169MWofnon-residentialsolarPVcapacityand226MWofresidentialPV,foratotalof1,395MWnewlyinstalledsolarin2020(seeFig.GW15.1).That’sayear-on-yeardecreaseof60%.Thefirstquarterof2021showedonlyadditionsof105MWoflargerPVsystems.Incumulativeterms,6,873MWofsolarwasinstalledinUkrainebyJanuary1,2021,with779MWor11%ofthiscapacityconsistingofresidentialPV(nolargerthan30kWinsize)1.ResidentialPVinstallationscontinuedtheirgrowthpathin2020,butadditionsofabout0.2GWareonlyabouthalfofthecapacityinstalledthepreviousyear.TheUkrainiangovernmentestimatesthat30,000residentialsystemswereinstalledinthecountrybytheendof2020(seeFig.GW15.2).AcrossallnewREStechnologiesinUkraine,exceptforlargehydropowerplants,themostelectricityisgeneratedfromsolarPV.BetweenJanuary2021andJune2021,solarPVsystemsgenerated926.8GWhofgreenelectricity.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025120SOURCE:ASEU.©SOLARPOWEREUROPE2021FIGUREGW15.1UKRAINETOTALSOLARPVCAPACITY2014-2020,BYASEU012345678GWNon-residentialResidential201520162017201820192020Q1202120140.40.40.50.81.55.56.97.01Upto50kWonlyforthesystemsinstalledin2019.Solar/REtargets.LegalFrameworkTherearetwolong-andshort-termlegalregulationsontherenewableenergysectorinUkraine,whichprovidetargetsfordevelopmentofRESby2020andby2035.First,theNationalActionPlanonRESby2020hasthegoalof11%ofgenerationfromrenewableenergysources,includingbighydropowerplants,by2020.Havingpassedthisdeadline–withtheactualsharereaching11%oftheelectricitymix,thedevelopmentofanewNAPforenergyandclimatefor2021-2025isnowunderconsideration.Thesecond,theEnergyStrategyofUkraineby2035,statesthattheshareofelectricityfromrenewableenergysources,includinghydropower,shouldreach25%by2035;thatisupfrom11%bytheendof2020.RenewableenergymarketplayersconsiderboththesetargetsasnotambitiousenoughforUkraine.DriversforsolargrowthThemaintriggerforthedevelopmentofsolargenerationinUkraineandRESistheFITsupportscheme,whichappliestoallsolar,windandbiogenerationfacilities,butdoesnotapplytohydropowerplantsandpumpedhydrostorage(exceptsmallandmicrohydropowerplants).TheFITsupportschemeinUkrainewasintroducedin2009andisplannedtolastuntil2030,graduallydecreasinguntiltheendofitsvalidity.Theinitialratein2009forground-mountedsolarsystemswasEUR0.4653/kWh.Rooftopsystemsover100kWreceiveEUR0.4459/kWh,andforrooftopsystemsbelow100kWtheFITwasEUR0.4265/kWh.Asof2021,thereisaFITwithmuchlowerratesofEUR0.04/kWhfornewground-mountedPVsystems,EUR0.10/kWhforsystemsinstalledonroofsand/orfacadesofbuildings,andEUR0.16/kWhforresidentialsystemsbelow30kW.TheFITtariffsinUkraineareprotectedbythelaws“OntheElectricityMarket”and“OnAlternativeEnergySources”thatguaranteeanaveragepaybackperiodof5,5-7yearsfornewsolarsystems.TheFIThasstimulatedthedevelopmentofsolarenergyinrecentyearsandledtothesignificantreductionofequipmentcostsin2018/2019.Accordingtolawamendmentsintroducedinthemiddleof2019,theauctionsupportsystemshouldhavealreadybeenimplementedfornewREprojects,substitutingtheFITsupportscheme.The“pilot”auctionshouldhavetakenplaceinDecember2019andtheregularauctionsshouldhavestartedfromJanuary2020.Butthegovernmenthasnotyetannouncedthesupportquotasfor2020/2021auctionsandforthefuture,andhaspostponedthestartofauctions.GlobalMarketOutlookForSolarPower2021-2025121SOURCE:ASEU,basedonStateAgencyonEnergyEfficiencyandEnergySavingsofUkraine.©SOLARPOWEREUROPE2021FIGUREGW15.2UKRAINEDYNAMICSOFRESIDENTIALPVINSTALLATIONS2016-2020,BYASEU0010,00020,00030,00040,0002004006008001,000MWNumberofunitsCapacityNumberofunits20172018201920162020ChallengesThekeychallengesthattheUkrainiansolarsectorfacesincludealackoftrustfromtheinvestor’ssideinthegovernment’sactivitiesintheREsphere,hugedebtsforpurchasedelectricity,theongoinginternationalarbitragesaroundretroactiveFITcutsandthepossibleimplementationofanadditionalexcisedutyforrenewableenergyinlate2021.Moreover,theimpactofCOVID-19totheeconomiccontextinUkraineandthehighcostsofloansforresidentialPVaresignificantnewobstaclesforthedevelopmentoftheindustry,aswellasthedecreasinginvestmentclimate.DuetotheuncertaintyaboutthefutureofretroactivechangesforPPAsandproblemswithauctions,investmentsinnewPVreducedsignificantlyin2020comparedto2019.Thisalsocausedsignificantjoblossesforthelocalsolarindustry–morethan5,000employeeslefttheindustry.RESdevelopment2021-2025andconclusionsTheCOVID-19outbreakandtheintroductionofquarantinemeasuresinMarch2020,alongsidehighpricesontheelectricitymarket,couldleadtoanincreaseofself-consumptionPVsystemsin2021-2023.Thegovernment’shardstanceonrenewableenergyaddedtotheprolongeddifficultiesforeigninvestorshadincarryingouttheirbusinessduetotravelrestrictions.Allthiswilllowerforeigninvestmentsconsiderably.Asaresult,totalPVinstalledcapacityin2021inUkraineincentivisedbythesupportschemeswillbeatleast2timeslessthanthevolumebuiltin2020and5timesbelowthe2019installations.OncetheREauctionsupportschemeislaunched,itwilldramaticallylowersubsidiesforthePVindustryanditwillbecomethemaindriverforthedevelopmentofthesectoralongsidecorporatePPAs.Itwillleadtoanextgrowthphasefortheutility-scalePVsegment,butnotearlierthanin2022-2025.ASEUbelievesthatfurtherdevelopmentofBESSisnecessaryevenforachievingtheunambitious25%RESgoalby2035,andforfurtherrenewabledevelopment.AnappropriatelawtosolvethisissueisstillunderconsiderationattheParliamentenergycommitteesince2019.Inthecomingyears,aslowdownissettotakeplaceinthedevelopmentofallnewrenewablesinUkraine,unlessthegovernmentimprovestheframeworkconditionsfornewinvestmentsinthePVsector.Author:ArtemSemenyshyn,ExecutiveDirector,SolarEnergyAssociationofUkraine(ASEU).4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025122148MW,Progressovkaplant,Mykolayiv,Ukraine.©ScatecSolar16.SouthAfricaTheSouthAfricansolarPVmarketcontinuestogrow,rapidly,withpositivemarketindicatorscomingoutofvariousnationalgovernmentpolicyobjectives.AnnuallyinstalledPVcapacityin2020totalled1,313MW,brokendowninto813MWofutility-scalesystemsand500MWofdistributedgeneration.Cumulativecapacityreached4,172MW,ofwhich2,372MWisprovidedbyutility-scalesolar.Itisestimatedthat20%ofthisdistributedgenerationcapacityconsistsofresidentialsystems,withtheC&Isegmentcontributingthelargestbulkofrooftopcapacity.TheIntegratedResourcePlan(IRP2019)outlinedanewadditionalcapacityof6GWutility-scalesolarPVand6GWdistributedgeneration,themajorityofwhichisexpectedtocomefromsolar,tobeinstalledby2030.TheIRPelectricityinfrastructuredevelopmentplanisbasedonleast-costelectricitysupplyanddemandbalance,consideringsecurityofsupplyandtheenvironment,andwillresultina400%+increaseofsolarPVby2030.ThiswillincreasethePVinstalledcapacityfrom3%ofthecurrenttotalelectricitysupplyto11%by2030.Thepolicylandscapecontinuestochangeasgovernmentandindustryworktomeettheincreasingenergyneedsofthecountrywhilealsostrivingtodriveapost-covideconomicrecovery.ThecommitmentofPresidentCyrilRamaphosatoamendSchedule2oftheElectricityRegulationAct(ERA)andtoraisethelicensingexemptionthresholdfordistributedgenerationfacilitiesfrom1MWto100MW,shouldcausearapidincreaseinthedevelopmentoflargerscaledistributedgenerationprojects.ThisworkonupdatingtheregulationsthatwillallowmunicipalitiestodevelopandprocuretheirownpowergenerationprojectsshowsthatthegovernmentisworkinghardtocreatetherightpolicyenvironmenttolettheindustryfullyrealisetheIRP2019targets.SAPVIA’sgrowthreflectsthatoftheindustryitself.Fromjustsixmembersin2010,wenowrepresent544membersacrossthesolarPVvaluechain.Ourmembersreflectthediversificationofthesector,aswehavemovedfromtheinitialfocusontheutilityscalemarketthroughgovernmentprocurementtoanopen,distributedmarket.GlobalMarketOutlookForSolarPower2021-2025123SOURCE:SAPVIA.©SOLARPOWEREUROPE2021FIGUREGW16.1SOUTHAFRICASOLARPVMARKETSEGMENTS,BYSAPVIAResidential;8%Commercial;30%Utility-scale;62%ChallengesTherearestillchallengesaheadforthesolarPVmarketinSouthAfrica.AsaprioritytheIRPshouldbereviewedandupdatedtobetterenablegovernmentpolicyplanning.ProgresshasbeenhamperedbyalackofconsistencyintheprocurementofsolarPVprojects.However,itmustbenotedthatoverthelast12monthsthegovernmenthasrespondedwithpaceandurgency.FortheindustrytofullyrealisetheopportunitiesofREandsolarPVspecifically,weneedlong-termcommitmentsfromthegovernmenttoprocureonamoreconsistentbasis.Iftheindustryisconfidentofafutureprocurementpipeline,theywilltheninvestwithconfidenceinlocalmanufacturing,whichcouldthendevelopandthrive,offeringmorelocalopportunitiesforemploymentandupskilling.Asamatterofurgency,wemustaddressthecapacitychallengesatenergydistributorlevel,implementingtherightandmostappropriatebureaucraticprocessestoallowpolicytobeimplemented.Wealsoneedregulationsandenforcementsthatensurethatthehighestsafetyandqualitystandardsarerolledoutandmaintainedacrossalldistributedgenerationprojects.Asconfidenceinthemarketcontinuestogrow,wehaveseentheintroductionofmoreinnovativesolutionsthatallowrenewablestocompetewithtraditionalenergysources.Wealsoneedmoreinnovativefundingmodelsthatallowformoreparticipationfromnon-traditionalinvestors.OutlookLookingforward,thegrowingsolarPVindustrymustnotlosefocusonthejustenergytransitionthatsolarPVandrenewablesingeneralcandeliverforSouthAfrica.Weneedtoensurethatasthesectorgrows,weinclude,uplift,andupskillSouthAfricans,notjustthroughaccesstocheap,sustainableelectricitybutbyfocussingattentionandresourcesonhelpingcommunitiesadaptandbenefitfromourtransitiontorenewableenergy.Thejusttransitionmustdrawcommitmentsfromplayersacrossthesectoraswellfromthegovernment,andstrivetoelevateandempowerthroughskillsdevelopment.Wehaveanopportunitytocreateanoptimalworkforcethatdeliversabest-in-class,sustainableenergyinfrastructureforSouthAfrica.Author:NiveshenGovender,ChiefOperationsOfficer,SouthAfricanPhotovoltaicIndustryAssociation(SAPVIA).4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-202512475MW,Kalkbult,SouthAfrica.©ScatecSolar.GlobalMarketOutlookForSolarPower2021-202512517.BelgiumRecordyearforBelgiumin2020,installingmorethan1GWforthesecondtimeInBelgium,energypolicyisaregionalresponsibility,resultingindifferentsupportschemesandlegalframeworksinBrussels,FlandersandWallonia.Wewillhighlightthemarketdataandthemostimportantdevelopmentsineachregion,andthenaddresssomenationaltrends.MarketdataPreliminarydatashowsthattheBelgianmarketreachedatotalof1.14GWinstalledPVcapacityin2020.Thefinalnumberisexpectedtoincrease,asdataisstillpartial.Thisismorethanthepreviouspeakofjustabove1GWin2011.InBelgium,Flandersrepresentsabout57%ofthepopulation,Wallonia32%andBrussels11%.Weseethisreflectedintheinstalledcapacity,withFlandersbeingthebiggestmarket,followedbyWalloniaandBrussels.Overthelast5years,Flandersprovidedmorethan60%ofinstalledcapacity,withapeakofover80%in2020.Accordingtothepreliminarydatafor2020,theBelgianmarketgrew40%atthefederallevelcomparedto2019,whenannualinstalledcapacityreached812MW.InFlandersdemandgrewby50%year-on-year,whileBrussels’yearlyinstalledcapacityincreasedby32%andWalloniaby1%.Totalinstalledcapacityreached6.26GWbyendof2020,ofwhich4.71GWwasinFlanders,1.37GWinWalloniaand0.18GWinBrussels.SOURCE:EDORAandODE.©SOLARPOWEREUROPE2021FIGUREGW17.1BELGIUMSOLARPVINSTALLEDCAPACITY2015-2020,BYEDORAANDODE001,0002,0003,0004,0005,0006,0007,0002004006008001.0001,200Annualinstalledcapacity(MW)Totalinstalledcapacity(MW)WalloniaFlandersBrusselsCumulative20162017201820153,3523,5323,8624,3075,1196,25820192020FlandersDifferentchangesinsupportmechanismswereintroducedin2021.Forallnewresidentialinstallations(upto10kVA)installedasof2021,asubsidyhasreplacednet-metering,whichledtoasubstantialgrowthin2019and2020.Forlargerinstallations(40kWto2MWinvertercapacity),operationalsupportthroughgreenpowercertificateswasphasedoutandreplacedbyatenderingmechanism(“calls”).OnlytheprojectswhichrequestthelowestamountperestimatedMWhgetinvestmentsupportviathesecalls(pay-as-bid).Project-specificoperationalsupportviagreenpowercertificatesnowappliesforinstallationsbiggerthan2MW(insteadof750kWpreviously).MostofthePVinstallationsarerooftop-based.Flanderswantstomaximizetheuseoftherooftopstoreachitsgoals,andcurrentlyuseslessthan5%oftheoptimalorientedrooftopspace,withover65GWinrooftoppotentialremaining.ThebulkoftheFlemishmarketconsistsofresidentialinstallationswithaninverterofupto10kW.TheFlemishregulatorreceivedjudicialapprovaltoendnet-meteringforexistinginstallationswhenadigitalmeterispresentandtoreplacethelumpsumprosumertaxbynetworktariffsbasedonmetereddata.Thishasanegativeimpactonthereturnoninvestment,whenself-consumptionislowand/orpowerratioishighandhasledtoanegativepublicperceptionofregulatorystability.ThegovernmentintroducedmultipleregulatorychangestolimitthefinancialimpactonexistingsolarPVinstallations,amongstwhichthereweretwochangestoincreaseself-consumption:anincreasedsubsidyforbatterysystemsandanewsubsidyforenergymanagementsystems.Forinstallationsbiggerthan10kVA,mostinstallationshadaninverterwithmorethan40kW,limitedto250kW(or750kW)tooptimizesupport.Duetotheintroductionofthetenderingsystem,wealsoexpectanincreaseofinstallationswithaninvertercapacityof1-2MWtobebuiltincomingyears.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025126SOURCE:ODE(preliminarydata).©SOLARPOWEREUROPE2021FIGUREGW17.2FLANDERSMARKETSEGMENTS2020,BYODE827.7MWp;149,544installations120.9MWp;765installations27.4MWp;43installations9.3MWp;3installations4.3MWp;127installations79.9MWp;592installationsInverter10-40kWInverter<10kWInverter≥10kWInverter40-250kWInverter250-750kWInverter>750kWWalloniaInWallonia,netmeteringremainsapplicableuntil2023forsystemsupto10kW,whiledigitalmetersarebeingintroduced.Since2020,ownersofPVinstallationshavetopayaprosumertarifftofinanciallycontributetotheiruseofthegrid.ThisresultedinadecreaseoftheWalloonmarket,duetoconsumers’negativeresponsetothistariff.Forinstallationsbiggerthan10kWasupportsystemvia“greenpowercertificates”stillexists.Therateofthissubsidydependsonthecategory(10-250kW,250-1,000kWorabove1,000kW).Thissupportsystemwillberevisedbytheendof2021,andwillresultintheintroductionofnewsubsidyrates.PVprojectscontinuetodevelop,bothforrooftopandnon-rooftopPV(parkinglots,brownfields,agriculturalland,andmuchmore).ThesameappliestoresidentialPV,partlyduetotheexpectedendofnetmetering.BrusselsInBrussels,PVinstallationsofanysizecanstillgetsupportvia“greencertificates”.NewcategoriesareabouttobeaddedforvarioustypesofBuildingIntegratedPV,whichwillboostthelevelofsupportforthesecategories.Furthermore,thediscussiononcollectiveself-consumptionandenergycommunitiesisveryactivewithinthisregion,withalegislativeinitiativeunderway.ResidentialPVstillbenefitsfromoperationalsupportviagreencertificatesandnet-meteringoncommodity.Allprosumershaveadigitalmeterandpaygridfeesbasedonactualconsumption,creatinganincentiveforself-consumption.NationaltrendsAcrossallofBelgium,weseethatthelinkbetweenPVandEV(electricvehicles)hasbecomemoredominant,wherePVonofficebuildingsisexpectedtoproviderenewableenergyforthechargingpointsforelectriccompanycars.AtaxbenefitfortheinstallationofchargingpointsisscheduledtobeintroducedinSeptember2021.ThisisaconcreteexampleofhowsolarPVismoreandmoreintegratedintoabroadersocialcontext.Authors:CécileHeneffe,PolicyAdvisorPV,EDORA;WannesDemarcke,PolicyAdvisorPV,&EllenVanMello,PolicyAdvisorPV,ODE.GlobalMarketOutlookForSolarPower2021-2025127©IZEN18.FranceAmbitioustargets,quitesomewaytogoOverviewofsolarPVdevelopmentsIn2020,Francecrossedthesymbolicthresholdofconnecting10GWofsolarpower.Moreover,the634MWconnectedduringthefirstquarterof2021markaquarterlyrecord,asthisfigureislargerthananyotherquarterlyinstallationinthelastdecade.Thismeans,theFrenchsolarfleetnowamountsto10.99GWintotal.Overthelast12months,1,317MWhavebeenconnected.Fortheyear2020,theFrenchoperatorsreportedthatonly858MWofPVwereinstalled.ThisisattributedtoadelayinmarketdatapublicationforQ4/2020.However,likein2019,itisexpectedthatthisnumberwillbeupdatedandslightlyexceed1GWofcapacity.Electricityproductionfromphotovoltaicsourcesstoodat2.4TWhproducedduringthefirstthreemonthsof2021,up13%comparedtothesamequarterin2020,thankstonewconnectedcapacities.Thecoveragerateforelectricityconsumptionbysolarenergythusstandsat2.8%overthelast12months.4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025128SOURCE:SER,basedonsystemoperatorsdata(datafor2020ispreliminary).©SOLARPOWEREUROPE2021FIGUREGW18.1FRANCESOLARPVMARKETINSTALLATIONS2010-2021,BYSER02,0004,0006,0008,00010,00012,000MWConnectedsolarpowerperyearCumulativeconnectedsolarpower201920202021March20122011201020132014201520162017201810,35610,9909,5678,5467,6566,7736,1965,2974,3663,7272,5848781,0218908835778999316391,1431,706688858634SOURCE:SER.©SOLARPOWEREUROPE2021FIGUREGW18.2FRANCECUMULATIVESOLARPVGRIDCONNECTEDCAPACITYQ12021,BYSER<36kW;20%36-100kW;17%100-250kW;13%>250kW;50%SolarPVtargetsinFranceThe2015EnergyTransitionforaGreenGrowthlawsetambitiousgoalsfor2030,whichwerealsoconfirmedintheClimate&EnergyLawadoptedlastyear.TheseobjectiveshavebeenimplementedforeachtechnologythroughtheMulti-AnnualEnergyProgramme(MAEP).Thisdefinescleartrajectoriesandvolumetricobjectivesforthecoming10years.TheMAEPobjectivefortheendof2023,whichrequiresanoperatingsolarfleetof20.1GW,hascurrentlybeenreachedbyalittlemorethanhalfway,53.9%.ArevisedversionofthefirstMAEP,adoptedlastspring,confirmedthewillingnesstostronglyacceleratethedevelopmentoftheFrench‘solarpark’.Thenewtargetspresentedfor2028liebetween35.1GWand44GWincumulativecapacity.Thesetargetssuggestthattheannualmarketneedstoriseto3.3GW/yearbetweennowand2023,andthento4GW/yearbetween2023and2028.Thismeansbetween330and400km²ofPVareawillbeinstalledinFranceforground-mountedandbetween150and200km²forrooftopinstallations.Therefore,solarpowerispositionedasoneofthemostimportantcontributorstotheFrenchenergytransition.DriversforsolargrowthCallsfortendersarethemaindriverforachievingthesetargets,with3.2GWscheduledeveryyear.Two-thirdsofthesetenderswillbeground-mountedinstallations.Theremainingthirdwillbeattributedviacallsforrooftopinstallations.Formanyyears,theFrenchrenewableenergyassociation(SER)advocatedthatprojectsforrooftopinstallationsbelow500kWbeexemptfromtenderingproceduresandeligibletoafeedintariff(FIT),inlinewiththecurrentStateAidGuidelines.AftermorethanayearofworkwiththeFrenchgovernment,thenewthresholdwillbeimplementedthisautumn.RaisingtheFITthresholdfrom100kWto500kWshouldmakethingseasierforthismarketsegment,whereprojectswerepreviouslylimitedbytenderingprocedures.Additionally,theself-consumptionmarketforwhichadedicatedframeworkhasbeenputinplaceisgrowingrapidlybutstillrepresentsasmallinstalledcapacity.InQ1/2021,109,236installationswereself-consuming,representing472.5MW.GlobalMarketOutlookForSolarPower2021-2025129SOURCE:SER.©SOLARPOWEREUROPE2021FIGUREGW18.3MULTI-ANNUALENERGYPROGRAMMETARGETS05101520253035404550GWInstalledcapacityFirstMEAPtargetRevisedMEAPlowtargetRevisedMEAPhightarget20082009201020112012201320142015201620172018201920202021202220232024202520262027202820.14435.1ChallengesReachinganambitioustargetof44GWofsolarpowerinFranceby2028,comparedtothe11GWcurrentlyinstalled,requiresregulatorychangesinordertohelpallmarketsegmentsgrow.Firstandforemost,oneneedstowidentheperimeterofeligiblelandincallsfortendersforgroundmountedprojects.Giventhe2028MEAPtargetandgiventhatthedistributionofmajorprojectsremainsconstant,wecanexpectalmosttwothirdsofsolarpowertobeinstalledontheground.Therefore,ageneralreflectiononlanduseisnecessarytotakeintoaccounttherealimpactofPVprojectsonsoilsandtofacilitatetheirdevelopment.Inaddition,innovativePVprojectswithespeciallylowlanduseimpacts,suchasAgri-PVandfloatingsolar,shouldbeencouraged.Moreover,thedevelopmentofphotovoltaicprojectsistightlyregulated.Someadministrativeproceduresandarchitecturalplanningissueshavetobeclarifiedandsimplified.Somelocalservicesmayhaveanambiguousanddebatableinterpretationoftheframeworkinplace.Thiscansometimegobeyondcurrentregulatoryrules,forexample,regardingfireprotectionrules.Administrativedeadlinesalsoneedtobeshortened.FrancepromotesalowcarbonfootprintsolarPVindustry.Thecarboncriteriainthecallfortendersisseenasafundamentalpillarofanindustrialstrategywhichshouldgohandinhandwiththemarketdevelopment.InlinewithwhattheFrenchrenewableenergyassociation(SER)advocated,thecarboncriteriawillbesetat500kgCO2e/kWinthenewcallfortenders’specifications,enteringintoforcethisautumn.ThankstotheworkofstrongR&Dcenters(INES,IPVF,etc.),thedevelopmentoftheFrenchindustry’sinnovationcapacitiesandtechnologicalbreakthroughswillalsoimprovecompetitiveness.Finally,asmentionedabove,self-consumptionisstillasmallmarketforsolarPVenergy.Thesupportmechanismsforself-consumptionprojectsneedtobeadaptedsoastoenhancethevalueofallelectricityproduced,self-consumed,andinjectedintothegrid.Thisneedstooccuratlevelsthatallowtheprojectstobefinanciallysecured.Openingupself-consumptionwithoutpenalisingconsumers,whoarenotalwaysabletoconsumealloftheirproduction,isalsoawayforward.Author:MarieBuchet,HeadofSolarPower&SolarHeat,SyndicatdesEnergiesRenouvelables(SER).4GW-scalemarkets/continuedGlobalMarketOutlookForSolarPower2021-2025130Agri-PVgreenhousesinEyragues,France.©AmarencoGlobalMarketOutlookForSolarPower2021-2025131ThestrongambitionofFrance,with20.4GWpaimedby2023,translatesintoaprogressiverarefactionoflandeasilyavailableforthedevelopmentoflargephotovoltaicplants,potentiallyinducingmoreconflictsofusethantoday.Forthisreason,CNR,theRhoneconcessionaryandtheleading100%renewableelectricityproducerinFrance,isinterestedinnewtypesofsitestopromotephotovoltaicfieldandsupportthedevelopmentoftheterritoriesinasustainableandinnovativewayallalongtheriverRhone.Floatingphotovoltaicsisanimportant昀eldtobeexplored,giventhelargenumberofarti昀ciallakesandwaterwaysintheterritories.Inthislight,CNRhasdevelopedin2019LaMadone,its昀rstpilotprojectof昀oatingsolarplantonanirrigationlakenearLyon.WinnerofaFrenchnationalcalloftenderforinnovation,the635panelshavebeeninstalledinaconstrainingcontext:thesiteisstillunderindustrialexploitation,theanchoringsystemmustallowtheplatformtofollowthevariationofwaterlevelof10mduetoirrigationneeds,andthebodyofwaterwelcomesrecreationalactivitieslike昀shing.Thisplantof2500m2illustratesthetransversalpotentialofthistechnologywithnewfunctionalitiesgiventothelake:昀rst,thefutureself-consumptionoftheenergybytheirrigationpumpsprovidesasolutiontotheriskofanupwardtrendinthepriceofelectricity,whichweighsheavilyonthecostofirrigationandthereforeonthecostsbornebyfarmers;second,theplantbooststhedevelopmentofaquaticbiodiversitythanksto16昀shsanctuariesinstalledundertheplatform,andscienti昀cmonitoringover5years;last,aneducationalpathinformsthesite’susersabouttheenergyandagriculturalissuesoftheirregion.CNRplanstobuildothers昀oatingplantsonanindustrialscale,thenextonebeingover30MWpand35hectaresinChateauneuf-du-Rhône.Solarinnovationalongriversisnotlimitedtowaterareas.Managingalmost500kilometersoflinearsites,CNRisalsointerestedinthedevelopmentoflongplants,ondikes,bikepaths,roadsandrailwaysthatrunalongthem.Thebifaciallinearphotovoltaicplantof350matSablons,underconstructionin2021,isthe昀rstlinearparkofCNR.CNRisalsoworkingonotherprojects:a2kmoflinearphotovoltaicshadestructureonacyclepathfollowedbyaprojectof20km.Inthiscon昀guration,theprincipalissueisto昀ndtheelectricalarchitecturesuitablefortheselinearsolarplants.Therefore,CNRisespeciallyworkingonDCnetworksolutions.CNRphotomontageoflinearandbifacialsolarplantofSablons.Agrivoltaismisalsounderstudy,witha昀rstpilotprojectplannedfor2021inahorticulturalschool.Riversandshores,fromtheRhoneandelsewhere,atthecrossroadsoftransport,industrialactivities,energyandenvironment,areprivilegedvectorstopromotethesesolarinnovationstobeattheheartoftheenergytransition.INNOVATIVESOLARENERGYWITHTHEFLOWCNR昀oatingsolarplantLaMadone.GlobalMarketOutlookForSolarPower2021-2025132Solarisbackandstrongerthaneverbefore.ThecomingyearswillseemuchmoresolarpowerplantcapacitycomeonlinethananticipatedintheGMO2020,whichwaswritteninthemiddleofthefirstwaveofCOVID-19lastyear.InthisGMO2021,weforecastlargergrowthforeachofthecomingyearsthanlastyear(seeFig.23).Thedeploymentassumptionis‘only’9%higherfor2021,butthatisbecause2020turnedouttobesuchasurprisinglygoodyear.Between2022and2024,ourgrowthexpectationfornewinstallationsisbetween20–23%higherthaninlastyear’sreport.Whilelastyearweforecastedglobaldemandtoreach200GWin2024,wenowexpectthisleveltobereachedtwoyearsearlier,by2022.Wealsoexpectnewannualinstalledcapacitiestoreach266GWin2025inourMediumScenario;toputthisintoperspective,onlysixyearsago,in2015,thiswastheworld’stotalinstalledsolarpowergenerationfleet.Ourincreasinglypositiveviewisbasedonsolar’simpressiveresilienceandrecentmarketandtechnicaldevelopments.Despiteallthenegativeimplicationsofthepandemic,solar’sunmatchedcharacteristicshaveandwillcontinuetoliftthetechnologytonewlevels.NoGlobalmarketoutlook2021-20254©LaurentChamussy/EuropeanUnion,2021©SOLARPOWEREUROPE2021FIGURE23COMPARISONMEDIUMSCENARIOGMO2020VSGMO2021GW20202021202220232024202511214415015816916918418020004080120160200240280138163203225239266GMO2020GMO2019GMO2021otherpowergenerationsourcecancompetewithsolar’sversatility:fromlarge-scalepowerplantstoonsitecommercialandresidentialrooftops,tobuilding-integrated,off-grid,andmobilepowersolutions.Solar’scostleadershipimprovedagainin2020,nowoutcompetingfossilfuelsandnuclearinanyunsubsidisedinvestmentcase,anditwillcontinueitscost-reductionpathformanyyearstocome.Thecurrentsiliconsupplyshortageandothermaterialconstraintsthathaveledtotemporarysolarproductpricehikes,areonlybriefincidencesthatarealreadybeingresolved.Manyrecentproductinnovationsacrossthevaluechain–ashighlightedinourchapterontechnologytrends–furthersupportsolar’sleadingrole.Thelatestmajortrendintheenergytransitionis‘greenhydrogen’,whichreferstohydrogenproducedfromrenewables,mostlysolarandwind.Ifonlyafractionoftheplansrecentlyannounced,inparticularinAustralia,cometofruition,solarinstallationnumberstowardstheendofthat5-yearforecastcouldbesignificantlylarger.However,whencomparingourGMO2021estimatestoourpre-COVID-19report(GMO2019)forecasts,wecanseethattheassumptionsfor2020at144GWwerehigherthanthe138GWthatwasactuallyinstalled.Alsothe2021estimateof158GWisclosetowhatweassumenowforthatyearat163GW,whiletraditionallymarketassumptionsareadjustedupwardseachyear.Despiteitsresilience,solarhaslostprecioustimeinfightingagainstclimatechangeduetothewidespreadeffectsofthepandemic.Inconclusion,weneedtobemoreambitiouswhenitcomestosolardeploymentwithmoresupportfrompolicymakers,inordertoimplementbetterpolicyframeworksthatenablesolartoreachitsfullpotential;COVID-19recoverypackagesareagoodopportunitytotakeadvantageofthejobintensityofsolar.Whileitiscertainlyimpressivethatsolaraddslargeryear-on-yearpowergenerationcapacitiesthananyothertechnology,with70%ofglobalpowerstillcomingfromnon-renewablepollutingenergysources,withsolarmakingupjust3%ofthepoweroutput,thereisanurgentneedtoaccelerategrowthratestokeepthe1.5°Cglobalwarminglimitwithinreach.GlobalMarketOutlookForSolarPower2021-2025133Thispageisintentionallyleftblank.GlobalMarketOutlookForSolarPower2021-2025134GlobalMarketOutlookForSolarPower2021-2025135Leadingthewayingreenhydrogen.smartenergy.netGreenHydrogenSolarPVWindPowerSolarPowerEurope-LeadingtheEnergyTransitionRond-PointRobertSchuman2-4,1040Brussels,BelgiumT+3227095520/F+3227253250info@solarpowereurope.org/www.solarpowereurope.orgISBNNUMBER9789464073492

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