Frost & Sullivan sees solar reaching grid parity by 2020
Written By: Stratton Report
July 20, 2016
On July 20, Frost & Sullivan predicted that the cost of solar power systems for both residential and utility-scale PV will reach grid parity by 2020 and increase uptake of decentralised solar energy. The research firm noted that this will benefit raw material suppliers, solar cell manufacturers, solar module manufacturers, and balance of system equipment suppliers. The firm finds that market revenues stood at $113.75 billion in 2015 and will grow at a CAGR of 9.5% to reach $179.13 billion in 2020.
Frost & Sullivan Energy & Environment Research Analyst Pritil Gunjan observed:
“Pro-solar incentives and the recently made pledges at the COP 21 summit will ensure that the market for solar PV continues to grow exponentially over the next 5 years. Grid integration of renewables and investment in energy storage initiatives are other market enablers.”
The firm finds that Asia will see aggressive expansion of solar PV fuelled by economic growth, urbanisation and greater electrification, with the region’s market share rising to 64.1% by 2020 with China, India and Japan together accounting for more than 80% of all solar installations planned over the next 5 years. China and Japan will lead with compelling FiT rates and capacity based rebate programs. North America will witness a robust growth with the extension of investment tax credit eligibility for solar generators until 2019. By 2020, the region will have about 20 million residential prosumers. Fiscal incentives, technological advancements, and new solar leasing models will be strong drivers.
Frost & Sullivan predict that Europe, however, will languish as subsidies and incentives are withdrawn. In Europe, huge overcapacity, coupled with price decline of solar modules, will see suppliers struggling to make profits.