by Shane Henson — June 26, 2013—The solar crisis will become a boon as record low prices boost demand, more than doubling the market to 61.7 gigawatts (GW), according to a report recently released by Lux Research, an independent research and advisory firm providing strategic advice and ongoing intelligence on emerging technologies.
Per the report, Market Size Update 2013: Return to Equilibrium, the solar photovoltaic (PV) market is poised to rise from the ashes of its 2011 crisis to grow to $155 billion in 2018, as market forces engineer a turnaround to a healthy 10.5 percent compound annual growth rate (CAGR).
In the most likely scenario, the PV market will grow at a modest clip to 35 GW in 2013 before rapidly ramping up to 61.7 GW in 2018, Lux Research predicts.
“Manufacturers’ nightmare is turning into a long-term boon for the industry. Record low prices pushed gross margins to near zero or below, but they’ve made solar installations competitive in more markets,” said Ed Cahill, a Lux Research associate and the lead author of the report.
To determine the viability and competitiveness of solar in each market, Lux Research analysts used a detailed levelized cost of energy (LCOE) analysis in 156 separate geographies, accounting for 82 percent of the world’s population. Among their findings:
- The United States, China, Japan, and India will take over where Germany and Italy left off. With an 18 percent CAGR to 10.8 GW of installations in 2018, the United States will emerge the world’s second-largest market. But China will leapfrog it, growing over 15 percent annually to 12.4 GW in 2018.
- Utility-scale installations will grow the fastest, and commercial the largest. Utility-scale solar, the smallest segment in 2012 at 8.6 GW, will grow the fastest to 19.9 GW in 2018 as developing markets turn to PV. Globally, commercial applications reign supreme as markets like the USA and Japan move to large rooftop installations.
- Opportunities abound for cheap intellectual property. Struggling start-ups present opportunities to acquire intellectual property at record low prices. A case in point: Hanergy acquired Miasolé—which in 2012 announced the leading CIGS module efficiency at 15.5 percent—for only $30 million after investors had pumped $500 million into the firm.
