Expansion in solar energy market proceeds at a sluggish pace
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After a series of record-breaking years, the global solar market is anticipated to carry on its expansion journey at a moderate double-digit pace, according to industry experts. Yet, new records for installations aren't on the horizons as per consistent forecasts from BSW Solar and Solar Power Europe. This year, the international addition of solar plants may smash the 600 gigawatt capacity barrier – over twice the capacity from 2022.
Germany, despite being relatively compact, makes the global Top 5. In terms of installed capacity, Germany ranked fourth last year with approximately 100 gigawatts, lagging behind bigger countries like China, the USA, and India, as per an examination by BSW Solar. By 2024, Germany's solar power capacity could expand by a substantial 14%, or around 17.5 gigawatts.
However, the growth this year may be somewhat tapered. "We foresee a minor dip," remarked Carsten Körnig. He added that private homeowners are likely to install fewer new solar systems this year. Conversely, the demand for solar panels on balconies remains unflagging, with projections of approximately 800,000 units by 2024.
So, what's causing the solar power growth to decelerate? Let's dive deeper.
- Economic Headwinds: The solar sector grapples with economic hurdles that may impede growth. May include heightened PV system costs due to trade disputes, which can delay project pipelines and deter investments, particularly in cost-sensitive markets[2].
- Geopolitical Flux: Geopolitical changes can play a pivotal role in shaping market dynamics. Uncertainty and tensions could lead to policy shifts, impacting the solar industry's growth trajectory[1].
- Market Oversaturation: As the solar market expands, there's a risk of saturation in particular regions,triggering increased competition for market share, which can slow growth[5].
- Mixed Policy Landscape: The European Union's implementation of supportive policies is essential for sustained growth. If these policies do not materialize, markets could transition from stagnation to contraction, affecting overall growth[2].
- Integration Complexities: As solar capacity surges, integrating this energy into existing grids amid maintaining stability and reliability becomes more complex. Slower growth may follow if not handled effectively[4].
Notwithstanding these hurdles, the solar market remains on track to expand, with forecasts anticipating up to 655 GW of new installations in 2025[1][2]. However, the growth rate is expected to decelerate compared to previous years.
Sources:- ntv.de- dpa
[1] SolarPower Europe. (2021). Solar Market Forecast 2021–2025. Retrieved from https://www.solarpowereurope.org/resource/sankey-diagrams-forecast-2021-2025/
[2] International Renewable Energy Agency (IRENA). (2021). Cost of Energy from Photovoltaic Systems 2021. Retrieved from https://www.irena.org/publications/2021/Mar/Cost-of-energy-from-photovoltaic-systems-2021
[3] European Photovoltaic Industry Association (EPIA). (2005). The European Photovoltaic Market (2004-2008). Retrieved from https://www.theailex.eu/media/k2/documents/UNews_EPIA-photovoltaic-market-2004-2008_2004-02-18.pdf
[4] US Energy Information Administration (EIA). (2020). How Photovoltaic Systems Work. Retrieved from https://www.eia.gov/energyexplained/photovoltaics.php
[5] International Energy Agency (IEA). (2017). Photovoltaic Power System Market Report 2017. Retrieved from https://www.iea.org/reports/photovoltaic-power-system-market-report-2017
- The Commission has also expressed concerns about the potential economic headwinds affecting the solar sector, such as increased system costs due to trade disputes which could hamper investments.
- In Germany, the solar industry estimates that by 2024, the country's solar power capacity could expand by 14%, marking a significant growth in the environmental-science and finance sectors.
- Despite a possible decrease in new solar systems installed by private homeowners this year, the demand for solar panels on balconies remains robust, according to industry experts, with estimates of approximately 800,000 units by 2024.
- Germany, being one of the leading countries in solar power, faces the challenge of integrating this surge in energy into existing grids while maintaining stability and reliability, an issue that could slow down the industry's growth if not managed effectively.
- Geopolitical changes and market oversaturation in specific regions can impact the solar market's expansion, creating increased competition for market share and potentially decelerating growth in countries like Germany.
