The International Energy Agency Photovoltaic Power System Programme (IEA PVPS) has published its latest “Snapshot of Global Photovoltaic Markets 2018”, showing, from preliminary analysis of the numbers, that the PV market probably stabilised in 2018. In total, about 97.9 GW of PV capacity was installed in the IEA PVPS countries and in other major markets during 2018, and up to 99.8 GW in total compared to 98.9 GW in 2017. The total installed capacity in the IEA PVPS countries and key markets exceeded the 500 GW mark in 2018.

IEA reports on the development of PV all over the world, based on information from official government bodies and reliable industry sources. This seventh edition of the “Snapshot” aims at providing preliminary information on how the PV market developed in the last year. The 24th edition of the PVPS complete “Trends in Photovoltaic Applications” report will be published in Q4 2019.

Summary

While the Chinese PV market experienced a limited decline in 2018 to 45 GW, it was compensated with larger installation volumes in several emerging and established markets. Amongst the growing markets, India can be cited, with 10.8 GW, Australia, which increased spectacularly in 2018 with close to 3.8 GW, Mexico follows with close to 2.7 GW, then Korea with 2.0 GW, followed by a declining Turkish market, but still above 1.6 GW. The Middle East and African markets experienced growth too – a large part of this will be visible in 2019 when most plants will be commissioned, especially in the UAE and Egypt. In the meantime, the US and Japanese market were roughly stable, while Europe grew. The European market rebirth was mainly driven by the significant growth in Germany and the Netherlands, while lower growth was visible in many countries.

In summary, the global PV market outside of China grew by 9 GW to 55 GW while the decline in China kept the global increase to about 1 GW, to a total of 99.8 GW. This growth outside China shows a different landscape for the PV market, with a 20% growth rate.

In total, PV contribution amounts to close to 2.6% of the electricity demand in the world. In the coming years, PV has the potential to become a major source of electricity at an extremely rapid pace in several countries all over the world. The speed of its development stems from its unique ability to cover most market segments; from the very small individual systems for rural electrification to utility-size power plants (today well over 1 GWp). PV is found to be suitable for the built environment through to large ground-mounted installations, owing to the various criteria that enable its deployment in most environments. In 2018, PV was the first source by capacity deployed globally. It is following a rapid growth path, which might be supported in the coming years by two key enablers: the decrease in battery prices and the rapid uptake of electric vehicles.

2018 market – key points

Preliminary reported market data shows a global annual PV market at a similar level to 2017. At least 99.9 GW of PV systems have been installed and commissioned in the world during the last year. While these data will have to be confirmed in the coming months, some important trends can already be discerned:

  • The total installed capacity for PV crossed the 500 GW mark in 2018
  • The global annual PV market was at least 97.9 GW in 2018. With non-IEA PVPS reporting countries, this number could grow to 99.9 GW, compared to 76.4 GW in 2016 and 98.9 GW in 2017. The 2.0 GW difference is from non-IEA PVPS markets countries mostly unreported African, Asian and Latin American countries.
  • This year saw the Chinese PV market contracting, from 53.0 to 45.0 GW. China is the leader in terms of total capacity with 176.1 GW installed
  • Outside China, the global PV market grew from 48.6 GW to 54.9 GW. India progressed significantly, as the annual market grew to 10.8 GW, becoming the second-largest PV market, including around 2 GW of distributed and off-grid installations
  • The US market decreased slightly to 10.6 GW, with utility-scale installations accounting for roughly 60 % of additions
  • The European Union installed 8.3 GW and the rest of Europe added roughly 1.1 GW.
  • Japan ranks fourth, with around 6.5 GW annual installed capacity.
  • Other markets increased spectacularly in 2018, especially Australia, with close to 3.8 GW, Mexico with close to 2.7 GW, Korea with 2.0 GW, followed by a declining Turkish market, still above 1.6 GW.
  • The MEA markets experienced growth, but a large part of this will be visible in 2019 when most plants will be commissioned, especially in the UAE and Egypt.

Largest market in Europe

The largest European market in 2018 was Germany (3.0 GW), followed by the Netherlands (1.3 GW), and France (862 MW).

  • In the top 10 countries, there are now five Asia-Pacific countries (China, India, Japan, Australia and Korea), two European Union countries (Germany and the Netherlands) plus Turkey, and two countries in the Americas (the USA and Mexico).
  • The entry level for the top 10 markets in the world in 2018 was around 1.6 GW, the highest level ever and the first time significantly above the GW mark.
  • The top 10 countries represented 87% of the global annual PV market.
  • Honduras, Chile, Germany, Greece, Italy, Japan, Australia, India and Morocco now have enough PV capacity to produce, in theory, more than 5% of their annual electricity demand with PV.
  • PV represents around 2.6 % of the global electricity demand and 4.3 % in Europe.
  • 32 countries had at least 1 GW of cumulative PV systems capacity at the end of 2018 and 10 countries installed at least 1 GW in the year.

Market snapshot

In 2017, on a similar basis to 2016, the PV market broke several records and continued its global expansion, by almost reaching the 100 GW threshold. One might have expected a similar market behaviour in 2018. However, the preliminary results show a stabilisation of the global market as the annual installation once again was about 100 GW in 2018.

For some years, the level of market development in China has been driving the global PV market to a large extent. Nevertheless, while the Chinese PV market grew until 2017, it experienced a limited decline in 2018. However, this decline in the Chinese PV market was compensated with larger installation volumes outside China. With around 45.0 GW installed in China in 2018 compared to 53,0 GW in 2017, the global PV market showed has stabilised.

Apart from the change of position of some countries, the top five were similar to 2017. Then again, the major development of the year 2018 was the growth of several other countries behind the top five: Australia installed 3.8 GW, Mexico 2.7 GW and Korea 2,0 GW. Turkey followed with 1.6 GW in a declining market. Looking a bit more in depth at European Union countries, Germany experienced the best year since 2013, with about 3.0 GW installed and the Netherlands entered the top 10 with 1.3 GW installed during the year.

Asia continues to dominate the global PV market. Some already established major Asian markets, such as Taiwan or Malaysia, experienced a growth in 2018, while the development in other markets, such as Thailand, Indonesia, the Philippines and Vietnam, has been intermittent over the years. Asian markets represented slightly less than 70% of the global PV market, a decrease in 2018 as compared to 2017. 

US decline

In the Americas, the decline of the US market (10.6 GW) was balanced by Mexico which installed about 2.7 GW in 2018. Brazil, which installed 1.0 GW in 2017, saw its market contracting to less than 400 MW. Chile installed 461 MW, a decline compared to the 657 MW in 2017. Canada experienced a new market decline in 2018, as the market went down to 100 MW in 2018 as compared to 249 MW in 2017. The Americas represented around 15% of the global PV market in 2018.

In Europe, Germany confirmed its leading position on the continent and installed close to 3.0 GW in 2018. The Netherlands with 1.3 GW was the major event of the year, followed by France still below the GW mark. Other countries in Europe experienced interesting developments but at a lower level: Ukraine (more than 700 MW), Hungary (400 MW) and Belgium (405 MW). Italy (435 MW) and Spain (374 MW) both made small comebacks after years of almost complete market absence. The UK went down to a very low level compared with previous years (268 MW), while the market in Poland increased (214 MW). Some medium-size European market remained stable, such as Switzerland (260 MW) and Austria (153 MW). In the Nordic countries, Sweden (155 MW), Denmark (91 MW), Finland (59 MW) and Norway (23 MW), saw a growth of their PV markets in 2018. The Portugal market also grew slightly (88 MW). Turkey’s installed 1.6 GW was a major decline compared to 2017. Europe as a whole represented slightly more than 9% of the global PV market in 2018.

Middle East and Africa

In the Middle East, Israel installed an additional 432 MW, the highest performance in years. Morocco installed 591 MW, while plans are being made for significantly more. Several other countries in the region experienced a rapid growth and hundreds of MW of installations, which will mostly be connected in 2019. In the UAE and Egypt alone, IEA expects more than 2 GW to be connected in 2019, from plants which had already been partially developed by the end of 2018.

In Africa, South Africa became the first African country to install close to 1 GW of PV in 2014, but the market has declined significantly since then, as only 60 MW was installed in 2018. New small projects have appeared everywhere, but few countries have actually installed significant amounts in 2018. Africa and the Middle East represented around 6% of global PV installations in 2018.

World picture

Overall, the global PV market would have been significantly above the installation level of 2017, if China had maintained a similar growth level to the rest of the world. The growth of the market outside China amounted to more than 17% in 2018 compared to 15% in 2017.

In 2018, 10 countries passed the GW mark with respect to the annual installed PV capacity. Eight countries now have more than 10 GW of total capacity, four have more than 40 GW and China on its own showed 176.1 GW. Germany, which led the rankings for years, lost its leading position in 2015 and now ranks fourth (45.4 GW), with Japan third (56.0 GW) and the USA second (62.2 GW). With more than 120.4 GW of total capacity, Europe is now significantly behind the Asian leader which runs at least at 294.1 GW, with much more in the coming years.

In some parts of the world the development remains irregular as former GW markets, such as Thailand, South Africa, the Philippines, Czech Republic, Greece, Romania and Bulgaria, in 2018 deployed close to zero or just a few dozens of MW.

The key event of 2018 was the decision by China to constrain its market. To avoid an overheating PV market and to limit its influence on retail electricity prices, the Chinese central government limited the development of PV as of May 31, 2018. At the end of the year, the result was not as low as one could have expected, but the result was the same: driven by the fear of a declining market, component prices went down rapidly and especially module prices.

This decrease in prices accelerated somehow the deployment at the end of the year and contributed at least partially to stabilising the market.

The top markets in 2018

In the major evolutions, 10 out of the top 10 markets for PV in 2018 have installed at least 1 GW of PV systems. Looking at the total installed capacity, 32 countries are now in the 1 GW club. 

The five key markets have exchanged their positions in the last years, but show different evolutions. Several countries which in previous years installed significant capacities have left the top 10 for annual installed capacities.

The top 10 of total installed capacities shows more inertia due to past levels of installations. Note that capacities for a few countries that report PV installations in AC power, have been converted into DC power to facilitate comparison. This can lead to discrepancies with official PV data in several countries such as Spain, Japan or India.

Total installed capacity

On a worldwide level, China continues to lead with a cumulative capacity of 176.1 GW, followed by the European Union (120.4 GW), the USA (62.2 GW), Japan (56,0 GW) and India (32,9 GW). 

In the European Union, Germany leads with 45.4 GW, followed by Italy (20.1 GW) and the UK (13.0 GW). Australia reached 11.3 GW. All other countries are below the 10 GW mark.

The IEA PVPS countries represented 429.6 GW of cumulative PV installations together, mostly grid-connected, at the end of 2018. The IEA PVPS continues to cover 27 countries with at least 85% of the global PV capacity.

Additional countries that are not part of the PVPS programme represent at least 75.9 additional GW: this includes India with at least 32.9 GW, UK with 12.9 GW, Greece with 2.7 GW, Taiwan with 2.7 GW, Pakistan with 2.4 GW, the Czech Republic with 2,2 GW, Brazil with 1.6 GW, Ukraine with 1.6 GW, Romania with 1.4 GW, and Bulgaria with 1.0 GW. Many other countries have installed PV systems, but none have reached the GW scale.

While other countries around the world have reached various PV installation levels, the total they represent remains hard to quantify with any certainty. At present, it appears that 505.4 GW represents the minimum installed by end 2018 with a firm level of certainty. Remaining installations account for some additional 5.5 GW installed in the rest of world (that is, non-IEA PVPS reporting countries, off-grid installations, etc.) that could bring the overall installed capacity to around 510 GW in total.

An estimate of decommissioned existing PV plants is difficult to consider at this stage and IEA usually assumes that in general damaged plants are re-equipped and continue their lives. In the same way, repowering is still a marginal business owing to the limited age of most power plants but could become a reality after 2020. In general, it is considered that these two aspects do not generate enough change at present to be considered seperately. They also imply a lack of information since official statistics often do not consider these two aspects accurately. 

The effect of PV on global renewables capacity 

In May this year the International Energy Agency reported an analysis of its latest data on capacity installations that renewable capacity growth worldwide had stalled in 2018 after two decades of strong expansion. Renewables around the world added only as much net capacity in 2018 as they did in 2017. This unexpected flattening of growth trends raised concerns in IEA about reaching long-term climate goals.

Last year was the first time since 2001 that growth in renewable power capacity failed to increase year on year. New net capacity from solar PV, wind, hydropower, bioenergy, and other renewable power sources increased by about 180 GW in the year. That is only around 60% of the net additions needed each year to meet long-term climate goals.

PV as the makeweight

Since 2015, global solar PV’s exponential growth had been compensating for slower increases in wind and hydropower. But solar PV’s growth flattened in 2018, adding 97 GW of capacity and falling short of expectations that it would pass the symbolic 100 GW mark. The main reason was a sudden change in China’s solar PV incentives to curb costs and address grid integration challenges to achieve more sustainable PV expansion. Moreover, lower wind additions in the European Union and India contributed to stalling renewable capacity growth in 2018.

China added 44 GW of solar PV in 2018, compared with 53 GW in 2017. Growth was stable in the United States, but solar PV additions increased in the European Union, Mexico, the Middle East and Africa, which together compensated for the slowdown in China. Despite slower solar PV growth, China accounted for almost 45% of the total capacity increase in renewable electricity last year.

Capacity additions in the European Union, the second-largest market for renewables, saw a slight decline. Solar PV grew compared with the previous year, while wind additions slowed down.

Patchy increases

Policy transition challenges and changing renewable incentives resulted in slower growth of onshore wind in India and of solar PV in Japan.

In the United States, the third-largest market, renewable capacity additions increased slightly in 2018, mainly driven by faster onshore wind expansion while solar PV growth was flat.

Renewable capacity expansion accelerated in many emerging economies and developing countries in the Middle East, North Africa and parts of Asia, led by wind and solar PV as a result of rapid cost declines. The IEA maintains that governments can accelerate the growth in renewables by addressing policy uncertainties and ensuring cost-effective system integration of wind and solar.