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India emerges as key PV market

13 Jan 2015

Multi-gigawatt installation deal in India agreed by solar provider SunEdison as analyst IHS predicts rapid uptake.

Analysts at the consultancy company IHS are predicting a 25 per cent rise in global demand for photovoltaics in 2015, with the emergence of the Indian market set to contribute strongly for the first time.

“While 2014 remained a challenging time for the PV industry, it marked an inflection point in the market’s development,” announced IHS in a white paper it released last week. Those recent challenges have included fierce consolidation of an overcrowded and indebted supplier base and a similarly rapid shift in customer demand away from traditional markets.

What’s left is a healthier, if still fragile, industry, reckons Ash Sharma, senior research director for solar at the analyst firm. “All signs point to a strengthening recovery of the solar industry in 2015, even if the recovery itself remains incredibly fragile.”

Among his key predictions for the solar year ahead are that installation demand will grow at a double-digit rate, with the total PV power installed likely to be in the range of 53-57 GW. The IHS figuress suggest that around 45.6 GW of PV generating power was installed in 2014, up from a consensus of 38 GW the year before.

Other recent forecasts for 2015 include 58.3 GW from Bloomberg New Energy Finance and 54.5 GW from Mercom Capital (both reported by PV Magazine), while Deutsche Bank has reportedly cut its expectations from 59 GW to 54 GW.

“Geographically, the largest markets again will be China, Japan and the US, while the largest contributors in terms of absolute growth will be China, the US and India,” sets out the IHS white paper. That recognition of the emerging Indian market, long seen as having huge potential, echoed comments by Solarbuzz analysts late last year.

“India may become the most exciting PV market in APAC region during the next several years,” said Holly Hu, Solarbuzz analyst for Japan and India. “Since the new Prime Minister Narendra Modii came on board, the government of India has announced many ambitious solar PV development plans.”

SunEdison JV investment
Plans for several large solar PV parks are in the pipeline, with California-headquartered installer and module maker SunEdison revealing its considerable involvement in recent days. It has just signed a memorandum of understanding with the state government of Karnataka – in the south of the country – to develop 5 GW of renewable energy (including wind as well as solar electricity). The agreement includes details of a fast-track plan to implement between 1 and 1.5 GW of that total before the end of 2016.

The announcement came just a day after SunEdison said that it would consider building India’s largest solar manufacturing facility to date – in the form of a $4 billion joint venture plan with Adani Enterprises.

“This facility will create ultra-low cost solar panels that will enable us to produce electricity so cost effectively it can compete head to head, unsubsidized and without incentives, with fossil fuels," said SunEdison CEO Ahmad Chatila.

"By pairing SunEdison's solar technology expertise with Adani's extensive experience in the creation of infrastructure, we will be able to transform the region into a solar production powerhouse, creating 4,500 direct jobs and over 15,000 indirect jobs in the process."

A more detailed business plan must first be worked out, but if it does go ahead the aim is to build the new facility in Mundra, in the state of Gujarat, over a period of three years. “This facility will vertically integrate all aspects of solar panel production on site, including polysilicon refining, and ingot, cell, and module production,” say the two firms. According to BNEF analysts, the annual capacity of the plant could be as much as 7.5 GW once completed.

CPV growth; California and Chile
And while that investment will relate to conventional PV panels based on silicon cells, IHS is also predicting that concentrated photovoltaics (CPV) is set to enter a period of accelerated growth – despite the disappearance of many CPV developers in recent years and the recent news that Soitec would be forced to cut operations at its San Diego manufacturing facility.

Starting in 2015, IHS forecasts CPV market expansion of 37 per cent, with the market set to reach approximately 250 MW of new installations. “Installations of both high-concentration photovoltaic (HCPV) and low-concentration photovoltaic (LCPV) systems will expand at double-digit percentages every year through 2020,” states its forecast.

Following India, the pipeline of emerging markets looks like this: according to IHS, Chile will follow South Africa to reach the milestone of 1 GW of installed PV capacity, while other countries poised for rapid growth in 2015 include Jordan, the Philippines and Honduras. Conversely, great uncertainty still surrounds the potentially huge untapped solar reserves of Mexico, Brazil and Turkey, where oil is of course a key factor.

Meanwhile California is set to become the global leader in terms of solar power penetration this year. IHS expects that solar power will provide more than 10 percent of California’s annual power generation during 2015.

“This penetration level would push California above other leading global solar markets, such as Germany and Italy, in terms of the share of total power generation sourced from solar PV,” IHS analysts said.

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