Solar energy investment fell 19% in Q1 201818 July 2018
The latest quarterly report from Bloomberg New Energy Finance showed that investment in clean energy amounted to $61.1 billion in the first quarter of 2018, down 10% year-on-year, but there were pockets of strength, mainly in developing economies. A major feature was the drop back in solar investment, but with cause for optimism about the near future.
The quarter to the end of March saw solar investment slip back 19% to $37.4 billion, affected both by weaker activity in some markets and by lower unit prices for photovoltaic systems. BNEF estimates that benchmark global dollar capital costs per MW for utility-scale solar PV have fallen 7% in the last year.
Jenny Chase, head of solar for BNEF, said: “We expect the world to install even more solar this year than last year’s record of 98 GW. Two of the main drivers are the ongoing boom in China for both utility-scale and smaller, local PV systems, and the financing of very large solar parks in other developing countries as cost-competitiveness continues to improve.”
The largest solar project reaching financial close in the early months of 2018 was the 800 MW Noor Midelt portfolio in Morocco, made up of a mix of PV panels and solar thermal systems with storage. Development banks including KfW of Germany and the European Investment Bank have agreed to fund the complex, which is likely to cost around $2.4 billion.
The largest conventional PV installations financed in Q1 were the 709 MW NLC Tangedco portfolio in India, at an estimated $660 million, and the 404 MW Acciona and Tuto Puerto Libertad project in Mexico, at $493 million.
PV inverters market to decline
The global solar photovoltaic inverters market will decline from $6.3bn in 2017 to $3.7bn in 2022, with Asia-Pacific (APAC) relinquishing its leading regional share to the Americas over the forecast period, according to GlobalData, the data and analytics company.
The company’s latest report, Solar PV Inverters – Update 2018 states that solar PV inverters will hold an aggregate global market value of $22.2bn between 2018 and 2022, with an average annual value of $4.4bn during the same period.
In terms of solar PV additions, APAC eclipsed all other markets for the fourth consecutive year, accounting for about two-thirds of global additions in 2017. Consequently, the APAC region led the solar inverters market, with a value of $3.75bn. It was followed by Americas and EMEA (Europe, Middle East, and Africa) registering $1.71bn and $0.89bn, respectively.
However, APAC will see its share of the market fall from 59% in 2017 to 38% in 2022, while the solar PV inverter market share for the Americas will expand from 27% to 41% over the same period. EMEA’s share will increase from 14% to 21% between 2017 and 2022.
Subha Krishnan, a power analyst at GlobalData, commented “In terms of market value, China, the US, and Japan together held over 65% and led the global solar PV inverter market in the year 2017. The market developments in the top countries are largely due to economies of scale, emerging inverter technologies, and policy-based government and institutional industry.”
Between 2017 and 2022, the global solar PV inverters market is expected to witness a negative compound annual growth rate (CAGR) of 10.15%, in terms of market value. The estimated fall in the market value is mainly attributed to the fall in inverter prices.
Krishnan explains: “The solar inverter and module prices have declined for a variety of reasons, including but not limited to, persistent price pressure on equipment suppliers, the anti-dumping tariffs implemented by the US on Chinese modules, the euro and yen depreciation, and the downward adjustment of the minimum import prices. In the solar PV industry, buyers are price sensitive, creating persistent price pressure on equipment suppliers.”
The global solar PV inverters market has several strong participants such as Huawei Technologies Co Ltd, Sungrow Power Supply Co Ltd, and SMA Solar Technology AG. The highly fragmented nature of the market has also led to the reduction in solar inverter prices.
As a result of the falling prices, the total installed capacity between 2018 and 2022 is estimated to be close to 370.6 gigawatts whereas it stood at approximately 316.2 GW between years 2012 and 2017.
GlobalData’s report: Solar PV Inverters – Update 2018 – Global Market Size, Competitive Landscape, Key Country Analysis, and Forecast to 2022.