Tue. Nov 12th, 2019

Photo voltaic crops cheaper than pure gasoline ‘nearly in all places’ by 2023: WoodMac

Photo voltaic will quickly be capable to outcompete gas-fired crops all over the world. That doesn’t imply it is going to be any simpler to make a dwelling within the photo voltaic enterprise.

“By 2023, we predict photo voltaic’s going to be cheaper than gasoline nearly in all places all over the world,” Tom Heggarty, senior photo voltaic analyst for Wooden Mackenzie Energy & Renewables, mentioned Tuesday at GTM Photo voltaic Summit in Phoenix.

New gasoline crops stay aggressive with new utility photo voltaic in quite a lot of massive markets immediately, from China to the U.Okay. to South Korea. However that can not be the case by the early 2020s, as gear prices proceed to fall and aggressive auctions proliferate, Heggarty mentioned.

But for all that signifies, the information has not all been good for the worldwide photo voltaic market just lately.

The annual market didn’t crack the 100-gigawatt mark in 2018 because it was anticipated to do, due mainly to a policy-induced slowdown in China.

India, too, put up weaker-than-expected development final yr as 14 gigawatts of auctions have been canceled or postponed, or awarded tasks have been annulled.

2018 was the primary yr and not using a record-low value for a photo voltaic power-purchase settlement, following a protracted string of information in markets as numerous as South Africa, the U.S., Morocco and Saudi Arabia.

However setbacks in anyone market — even China — have gotten much less essential because the trade takes root all over the world. China accounted for 35 % of world photo voltaic installations via 2018, however that share will fall to 27 % within the 2019 to 2024 interval, WoodMac predicts.

Among the many vibrant spots on the horizon for the worldwide market, Heggarty pointed to:


Australia is a “sleeping big” that lastly started to “fulfill its promise” in 2018, placing up four gigawatts of photo voltaic capability — making it the world’s fifth largest market.

Australia beat the U.S. to 2 million photo voltaic installations by just a few months, and that’s despite having solely 9 million households.

“PV is now actually within the mainstream in Australia,” Heggarty mentioned.


After a prolonged stretch within the doldrums, the once-leading European photo voltaic market is beginning to present sustained development once more, and could possibly be on the cusp of a renaissance.

2019 shall be an essential yr as EU nations formally set up their 2030 targets for emissions-reduction and renewable power, together with laying out detailed plans for assembly these targets.

“We’re anticipating to see public sale pipelines confirmed; extra supportive measures for DG; group photo voltaic will develop into a very fascinating sector in Europe we predict,” Heggarty mentioned. “We additionally assume boundaries that exist for company PPAs shall be eliminated.”

Saudi Arabia

“Most likely the one rising market we haven’t seen a lot from but however which we really feel most optimistic round is Saudi Arabia,” Heggarty mentioned. “The financial alternative and rationale for photo voltaic in Saudi Arabia is actually clear.”

Saudi Arabia stays cripplingly reliant on crude oil for energy era. Throughout summer season months, the dominion burns 900,000 barrels of oil per day for electrical energy, equal to 1 % of world oil demand.

Saudi Arabia appears to have backed away from a 200-gigawatt photo voltaic plan, and as an alternative embraced a extra “reasonable” 40-gigawatt goal for 2030, Heggarty mentioned.

The nation is anticipated to be a worldwide top-10 market over the approaching decade, he added, with concrete steps taken in 2019.

Race to the underside

With a world of alternative stretching out earlier than the photo voltaic trade, it’s nonetheless a difficult place to make a revenue, and perhaps more and more so.

Whereas nations as soon as tended to get a really feel for photo voltaic power via a feed-in tariff earlier than later shifting to auctions, they’re now shifting far more shortly to auctions or tenders.

It took Germany 17 years from the time it established a FIT to when it adopted a aggressive public sale mannequin. China and Vietnam took simply three years, Heggarty famous. And Cambodia just lately deserted its plans for a FIT altogether and can transfer straight to auctions.

The rise of auctions have led to “extraordinarily aggressive” bidding, and the boundaries to entry are low for corporations seeking to develop or construct massive photo voltaic crops. “It’s not simply utilities and IPPs that may enter these sorts of markets; there’s a complete vary of corporations beginning to bid from a complete vary of nations,” Heggarty mentioned.

Such intense competitors signifies that profitable bidders are sometimes seeing fairness returns within the 5 to 7 % area. Margin compression impacts “everyone throughout the photo voltaic worth chain,” Heggarty mentioned.

The worldwide photo voltaic market is primed for development as auctions unfold, he added, “however these are fairly difficult markets to function in.”

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