1. Executive Summary

In 2018, the photovoltaic industry experienced its first retraction in demand in fifty years following abrupt cessation of deployment activity mid-year in China. As a direct result of the changes in China’s support policies for solar, total industry demand fell by 5% in 2018 to 89.1-GWp from 93.9-GWp the previous year, with prices taking an even more precipitous drop.

China’s demand for solar deployment fell significantly in 2018, decreasing by 27% from 51.5-GWp in 2017 to 37.4-GWp.

As the solar industry remains, incentive, subsidy, and mandate driven, and operates in an environment with many substitutes, abrupt changes in demand should be expected. As such, an abrupt change in China’s solar policy should not have been a surprise, as the government had signaled a desire to slow its market for years.

Expectations at the beginning of 2018 were for a 60-GWp year in China, as well as strong growth in other markets. Many observers expected market demand of >100-GWp in 2018. As most manufacturers were in a sold-out condition at the beginning of the year, on the supply side, manufacturers had prepared for strong demand and mid-2018 were left with inventory and, as many had begun implementing capacity expansion plans, overcapacity.

Strong demand in Europe, the US, Australia, the Middle East, and Latin America mitigated some of the fallout, but could not completely make up the difference.

Well into 2019, the global solar industry finds itself with unstable markets, poor infrastructure, weakening economies, unstable incentives, and vulnerable markets. To continue with strong growth, the infrastructure problems, over which the industry has no control, will need to be solved. Meanwhile, though the industry has fully embraced tenders and bidding, its lacks the infrastructure to support its growth goals and plans. 2019 has seen several countries cancel or delay auctions for various reasons, inappropriate infrastructure chief among them.

2.1      Report Highlights

  • The global market for solar modules grew by a compound annual rate of 38% from 1998 (134.8-MWp) to 2018 (89.1-GWp)
  • In 2018 the photovoltaic industry experienced the first slowdown in 50 years with demand falling from 93.9-GWp in 2017 to 89.1-GWp in 2018.
  • The cumulative total of PV cells/modules shipped from 1998 through 2018 is 466.9-GWp
  • In 2018 global system and application revenues decreased by 11% from $140.9-billion in 2017 to $124.8-billion in 2018
  • In 2018 the grid-commercial application, all system sizes, consumed 99.2% of PV modules
  • 97.5% of modules sold in 2018 were >300/Wp
  • Ongoing trade issues between the US and China indicate module and BoS component prices will be volatile through 2020
  • Taken globally, Tender bidding for solar projects continues to trend downward with many bids <$0.03/kWh, indicating a global average in the mid-three cent range trending down to <$0.02/kWh
  • From 2013 through 2018 the grid-connected application (residential, commercial and utility-owned) grew at a CAGR of 21% while the grid-connected commercial application grew at a CAGR of 26%
  • Australia’s market for solar deployment is estimated to experience growth of 27% to 38% through 2021