U.K.-based market observer IHS Markit has significantly raised its forecast PV installation figures for this year, from 158 GW to 181 GW.
In the white paper IHS Markit Top 10 Cleantech Trends in 2021, the analyst said this growth would represent a 27% year-on-year increase compared to 2020 and would materialize in a scenario that the analyst described as characterized by strong demand despite increased module prices, long lead times, and rising freight costs.
“Leading module manufacturers are sold out for the first half of the year,” said Josefin Berg, research manager for clean energy technology at IHS Markit. “There is no indication of price weakness for July shipments yet, manufacturing capacity remains sufficient, and no major material bottlenecks have arisen to change our forecast for 181 GW in global solar PV installations.”
Increasing prices for polysilicon, copper, and steel will contribute to maintaining PV module prices at current levels, although prices of solar glass may begin declining from the second quarter of the year. Demand, on the other hand, is expected to grow from May, both in China and the international markets.
“The solar supply chain is entering a new phase with a bigger focus on profitability, technology leadership, and consolidation,” IHS Markit stated. “Increasing consolidation on the manufacturing side–approximately 72% of modules were produced by the top 10 companies in 2020, according to IHS Markit research–in addition to high production costs and investors’ pressure to increase profitability, will be major factors in maintaining stable module prices this year.”
Profitability in the PV supply chain remains critical for all major manufacturers, as they require liquidity and capital for new investments in research and development and plans to roll-out the mass production of innovative PV technologies from 2023. “Investments will also be needed to adapt [the] module supply chain to [the] lower-carbon and environmental, social, and governance (ESG) standards demanded by the market,” said Edurne Zoco, executive director for clean energy technology at IHS Markit.
China is expected to be, once again, the world’s largest PV market in 2021, with around 60 GW of newly installed solar power. The U.S. market is expected to install 27 GW.
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