Global solar PV additions to rise to 110 GW in 2020: Platts Analytics

Global solar photovoltaic capacity additions are set to rebound in 2020, but thereafter annual growth could stall, according to a report released by S&P Global Platts Analytics.

The report forecasts global additions of 110 GW this year, an increase of 10% compared with 2019.

"As policy support is withdrawn across major markets, we do not see enough catalysts to accelerate growth in 2021 and beyond," Platts Analytics said.

"Beyond the projected increase in solar additions for 2020, we present a fairly conservative view post-2020, which sets us apart from other forecasters," lead author Bruno Brunetti said.

Analyzing some 60 GW of solar auctions in 2019, the report puts the weighted average of results around the mid-$40s/MWh, with "caution required" when considering record-low bids amid signs of "fierce competition among developers," especially for utility-scale projects.

CORONAVIRUS IMPACT

China continues to dominate the market both in terms of domestic installations and manufacturing, the report said.

In 2019, installations plunged to 30 GW after a sharp cut in subsidies was announced in May 2018, but picked up towards the end of last year, with 14 GW of capacity added in the final quarter.

Stalling economic activity tied to the Chinese coronavirus outbreak is likely to hurt first quarter of 2020 installations, but the major concern is delays to subsidy payments, with only 25% of entitled projects currently receiving payments.

"These delays are straining the financial position and liquidity of solar developers, likely undermining further investments," it said.

In spite of these concerns, there are structurally bullish factors that point to additions in the 35-52 GW range/year including renewables quota and potential coal-fired plant retirements.

For 2020, Platts Analytics pegs China solar additions at 40 GW.

SOLAR RENAISSANCE IN EUROPE

A rebound for solar in Europe is also expected despite a more conservative forecast for the region, it said.

Increasing tender activity, interest in power purchase agreements, together with lower module prices, "have enabled a new solar renaissance," according to the report, which adds that utility-scale investments look set to remain solid, although Platts Analytics says there are uncertainties over the growth in France and Italy.

Increasing renewable penetration, however, will start to undermine wholesale power prices in both Spain and France as baseload prices move toward the mid-Eur30s/MWh in the summer from 2023 onward, according to Platts Analytics' five-year electricity forecast.

In India, the report says 2020 additions are still set to reach 10 GW and then 11-12 GW/year despite headwinds, with counterparty risks and land availability the most significant.

Across other emerging markets, over 30 GW of utility-scale solar PV projects are currently planned or already under construction, it said, with Brazil, Chile and the Middle East to the fore.