Global solar market shifting to new geography

Global solar marketThe global solar energy market is changing, according to a report from NPD Solarbuzz this week.

Where Germany and other European countries have led the adoption of solar energy through the last decade, new markets are poised to overtake Europe.

For the first time, China is expected to become the largest solar market in the world.

Growth in demand for solar energy, calculated based on actual shipments, has slowed in recent years, said Michael Barker, a senior analyst with Solarbuzz. The slowing has resulted from declining government incentives in Europe’s “legacy markets.”

“The good news is that growth in new markets is outpacing the decline in those legacy markets,” Barker said.

While slower than the double-digit growth in the solar energy space a couple years ago, demand has still steadily increased every year, even amidst a weak global economy. Demand was up about 7 percent in 2012.

“We have looked at the long-term,” Barker said. “And we expect global growth to begin returning to double digit rates.”

That increased market growth will be driven by emerging markets like the Asian Pacific region, India, Latin America and Africa, Barker said.

“The reduction in equipment costs means incentive policies don’t have to be as aggressive,” Barker said.

That will open the door for some less wealthy countries to invite solar development in. They will just have to work on adjusting their regulatory environments to make solar easier to install and connect to the grid, something countries like Brazil and South Africa are already working on.

As the markets have changed, so has the way solar is deployed. Ground-mounted solar is increasing globally as some of these new markets, which are more comfortable working with large utility-scale energy production, are encouraging big solar farms over distributed generation. That method brings with it some economies of scale that Barker said will continue to make the cost of solar more attractive in emerging markets.

“What we’re seeing right now is really interesting,” Barker said. “The global solar industry isn’t going to be led by one region or one country. It’s going to be levelized across the world.”