Global solar growth seen 7% higher for 2020-2025 period: Platts Analytics

Global solar PV capacity additions are set to rise almost 50 GW more than previously forecast over the next six years, according to a report by S&P Global Platts Analytics.

The unit upgraded its 2020 to 2025 forecast by 7% or roughly 8 GW/year with a total 687 GW new solar capacity to be added during the period.

"While 2020 has seen construction activity disruptions and a more uncertain market and pricing environment, policy developments are turning once again supportive for renewables growth," it said.

Decarbonization policies were gaining momentum across the globe, with China, Japan and South Korea now joining Europe in pledging carbon neutrality in the long term, it noted.

"It's too early to say whether these long-term targets will materially alter renewables deployment trajectories in the near term. More promising policies are emerging, while the appetite for renewables investments remains upbeat, with a growing pipeline of solar PV projects across the major markets and decreasing remuneration of projects in solar PV auctions," Platts Analytics head of global power planning Bruno Brunetti said in the report.

Concerns about the pace of solar deployment in China faded as 2020 additions slowly climbed above last year's level despite unwinding subsidies, it said.

Platts Analytics upgraded its 2021 to 2025 China solar outlook by 5 GW/year to a 40 GW/year average for the period.

Constructive developments continued in Europe with German solar growth set for an eight-year high in 2020, upgrading its 2020-2025 view by around 8 GW/year for the continent, it said.

In the US, growing imports of solar modules confirm growing momentum for 2020 with Platts Analytics especially expecting higher utility-scale solar additions for the 2021-2025 period of 13 GW/year.

"The upcoming Biden administration can help support investments in the near term through an extension of the federal Solar Investment Tax Credit, which has historically been a major driver of new capacity," it said.

Solar capacity allocated through competitive auctions in 2020 across the globe continues to exceed expectations, while auction prices continue to move down, reflecting aggressive assumptions on solar resources, low costs of capital or optimistic market revenues, it said.