The solar sector will face some intense headwinds in 2012. Despite obstacles, the solar market may add at least 25 GW of new capacity in 2012. In North America the market for photo voltaic solar panels has a projected compounded annual growth rate of 42 percent between 2011 and 2015.
Last year was tough for US solar manufacturers. They were forced to reduce prices, decrease margins, close some manufacturing facilities, or even declare bankruptcy. In the 2011 solar market we saw increased manufacturing capacity but we also saw higher silicon supply, lower demand, oversupply and limited credit availability. Perhaps most significantly solar module prices experienced a sharp decline in part due to low cost Chinese PV cell manufacturers.
However, lower module prices have helped reduce the price of solar energy, making solar more competitive with other forms of electricity generation. Today’s manufacturing cost per watt can be as low as US$0.82. These prices can be expected to keep declining particularly as US homeowners are buying solar panels.
The disappearance of the Section 1603 Treasury Grants program at the end of 2011 mean that projects will need tax equity partners. Ernst & Young said that the year ahead will be difficult: “2012 will likely see a significant shortfall of tax equity, and the supply-demand mismatch may limit growth trends in solar and wind development.”
The reality of mainstream global grid parity is getting closer in the solar sector. The declining price of solar has allowed it to grow even in the unsubsidised markets in some emerging economies.
These challenges have not as yet affected overall investment in solar energy. Module prices are expected to further decline over the next five years. This will make solar energy more affordable even in the absence of subsidies.
Regardless of the economic environment, we can expect to see rapid change in renewable energy market and this is particularly true of photo voltaics.
© 2012, Richard Matthews. All rights reserved.
Related Posts
Renewable Energy in 2012: The Global Economic and Environmental Climate
Renewable Energy Is Our Only Hope
How the West can Capitalize on the Growth of Chinese Cleantech in 2012
Outlook for the Chinese Solar Industry in 2012
India is the World Leader in Cleantech Investment Growth
The EU Debt Crisis did Not Curb the Growth of Renewables in 2011
UK Renewable Energy 2011 Overview
UK Wind Energy
Cuts to UK Solar FiTs Could Prove Deadly
Cuts to UK Wind Power ROCs & FiTs
The Implications of the Expiration of US Renewable Energy Subsidies
Obama 2013 Budget Seeks to Make Renewable Tax Credits Permanent
US Wind Energy Market Review and Forecasts for 2012
Geothermal Energy Market Review and Forecasts for 2012
Private Sector Green Investment
Cleantech the Next Great Investment Opportunity
Will 2012 be the Best Year Ever For Clean-Tech Investment?
Investments from Corporate Sustainability is Driving Green Businesses in the UK
UK Government Investments in Efficiency and Renewable Energy
Growing US Corporate Investments are Driving Cleantech
Greener Vehicles Growing Cleantech and Providing Green Jobs
Cleantech Partnerships and Collaborations
California and Other US Leaders in Cleantech Investments
Leading US Cleantech Investment Sectors in 2011 Q3 and Q4
VC Investment in US Cleantech in 2011
US Regains Lead from China as Clean Energy Leader
Investing in CleanTech: Efficiency Upgrades and Renewable Energy
Discover more from Change Oracle
Subscribe to get the latest posts sent to your email.
