IHS Markit said that it expects 158 GW of new PV to be installed worldwide next year. That would represent a 34% increase over its expected 2020 figure, and the analysts expect a “wild ride” for the PV industry in 2021.
The firm expects 2020 installations to come in at around 118 GW, a 5% decline compared with 2019. While IHS Markit reduced its forecast earlier in the year based on the expectation of disruption caused by the Covid-19 pandemic, it said that is not the primary cause of the drop in installation figures.
“As many PV markets started coming back mid-year after local lockdowns, module price hikes startled developers,” IHS Markit analyst Josefin Berg told pv magazine. “Developers and EPCs without hard deadlines in the fourth quarter, that had not secured modules and/or were unwilling to pay a premium, had to delay procurement and push project completions into 2021.”
This delay to project completions, coupled with an increased appetite for renewables around the world, is cited as the main driver for the expected increase in installations next year. Analysis from IHS Markit finds that polysilicon prices rose 60% between June and September, followed by price hikes in glass and other materials that led module manufacturers to renegotiate contracts and raise their prices.
The firm expects prices to remain high in the first half of next year, before a projected easing on supply chain conditions takes effect and allows them to fall from the middle of the year. “Once prices start to come down, buyers that have been able to wait will rush to get modules,” says Berg. “All we can say is, 2021 will be quite a ride.”
China and the United States are still expected to dominate, with the two representing more than half of global installations. But beyond that, a wider range of countries are expected to contribute bigger numbers. “The other eight markets among the 10 largest will add up to just a quarter of the global demand, in comparison to 40% in 2019,” said Berg. He said that a parallel “consolidation and fragmentation” is at work with China and the United States consolidating their positions even as a growing number of smaller markets make up the remaining demand.
Among the top 10 regions, India is expected to retake its position as the third-largest PV market – though it could be hampered if high prices persist into the second half. Australia should overtake Japan for fourth place, and Spain is forecast to remain ahead of Germany as Europe’s largest PV market. Meanwhile, the analysts note that Colombia, Peru, Portugal, Greece, Ireland, Oman, Saudi Arabia, Zambia, Thailand, Philippines and Malaysia all should be worthy of attention next year.
“Anticipated module price declines in the second half of 2021 will create a procurement rush, but the exact supply and demand dynamics of the year are yet to be experienced,” said Berg. “But we know that the PV industry can still surprise us all.”
*This article was edited from the original for the pv magazine U.S. site by David Wagman.
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