Some 142 GW of new solar capacity will be added across the globe in 2020, a 14% increase from 2019, the market analytics firm IHS Markit Ltd. said in a Jan. 7 report that predicts strong growth despite waning subsidies in China, the U.S. and Europe.

With slowing demand in China, the world's top solar market, and the ongoing trade disputes between China and the U.S., the global solar industry is at a crossroads entering the 2020s, the report said. Still, technology costs have fallen, making solar cost-competitive with other power generation sources, especially coal. The growing severity of climate change also presages stronger government and corporate efforts to decarbonize.

"Another year of double-digit global demand growth in 2020 is proof of the continued and exponential growth of solar [photovoltaic] installations in the last decade," said Edurne Zoco, director of clean technology and renewables for IHS Market, in a press release accompanying the report.

China is experiencing volatility, following Beijing's efforts in 2018 to rein in growth through reduced subsidy costs. Solar demand in China in 2020 will be lower than the historic installation peak of 50 GW in 2017, while demand "is in a transitional phase as the market moves towards solar being unsubsidized and competing with other forms of generation," IHS Markit said. Uncertainty will remain until the government releases a five-year plan outlining its economic and policy priorities across the economy, including the energy sector.

Installations outside China grew by more than 50% in 2019 "and are expected to continue growing by double digits in 2020," according to the report. Emerging markets for renewable energy will become more important, as the top 10 solar markets are expected to see their share of the market fall to 73%, down from 94% in 2010, the report found.

The U.S. solar market, the world's second-largest, also faces challenges after Congress failed to extend the 30% investment tax credit in an end-of-the-year deal that will see the credit ramp down to a permanent 10% for projects that begin construction after 2021. Further, equipment tariffs, currently scheduled to wind down through 2021, are complicating market dynamics. Trade groups such as the Solar Energy Industries Association have warned that tariffs would lead to job losses and suppress demand, though companies such as Suniva Inc. argue that the taxes are strengthening U.S. solar manufacturing.

Demand in the U.S. nevertheless remains strong. IHS forecasts that installations will grow 20% in 2020, driven by states such as California, Texas, Florida, North Carolina and New York. In a September report, Wood Mackenzie and the Solar Energy Industries Association said the pipeline of U.S. solar projects swelled to 37.9 GW. Corporate procurement is expected to buttress growth.

Europe, after nearly doubling installations in 2019, will add more than 24 GW, a 5% year-over-year increase, IHS said. Spain, Germany, Netherlands, France, Italy and Ukraine will be the leading sources of demand, accounting for 63% of total European Union installations in 2020.

Spurred by lower module prices and a large project pipeline, installations in India in 2020 are expected to grow to more than 14 GW, following a flat year in 2019, the report said.

Mercom Capital Group LLC, in its recently released 2019 annual report on solar funding, said that corporate funding into the global solar sector, including venture capital, private equity, debt financing and public market financing, totaled $11.7 billion, a 20% increase compared to the $9.7 billion raised in 2018.