The global market for solar panels is forecast to reach $71.8 billion by the year 2017, primarily driven by robust demand for solar energy in the U.S. and developing markets such as China and India, according to a new report by Global Industry Analysts Inc. The market will also be driven by government policies, especially feed-in tariffs and investment subsidies, which are expected to play a major role in determining the future demand for solar panels.
Spiraling energy consumption worldwide is driving demand for increased energy production. Business opportunities presented by sustainable energies of the future, such as solar, wind, hydro, geothermal and biomass energies, are driven by their contribution in lowering CO2 and greenhouse emissions. Solar energy, in comparison with other renewable alternatives, offers a range of benefits and has gained tremendous prominence over the last few years with new solar power grids mushrooming in several countries.
Public utilities and private corporations have begun to integrate solar energy into their respective energy portfolios. An essential part of solar energy value chain, solar panels have always mirrored the trends in the overall solar energy sector, particularly the status of solar photovoltaic (PV) installations.
Following several years of perpetual increase, growth in the PV cells and panels market slowed down for a brief period in 2009 due to the global economic downturn, which was characterized by tightened credit and an increasingly cautious approach by banks toward lending. The credit squeeze not only affected the purchases of solar cells and panels for energy generation, but also deferred investments in solar cell manufacturing. Sluggish demand resulted in a significant inventory buildup, starting from the silicon raw material and PV cells to complete PV systems, which ultimately led to a considerable decline in prices of solar cells and panels.
The decline in demand for solar cells and panels was harsher in Europe, as the market suffered a twin blow with Spain registering drastic reductions in PV installations during the year. However. dramatic improvements in solar PV installations across the globe in the year 2010, particularly in Europe and Asia-Pacific, ensured that the cells and panels market staged a comeback in 2010. Supportive government policies, especially feed-in tariffs and investment subsidies, helped western European nations such as Germany, Italy, and the UK to achieve tremendous increase in solar PV installations in 2010, thus driving a resurgence in demand for solar panels during the year.
After making a comeback in the year 2010, the solar panels market in the immediate future will be challenged by planned subsidy cuts in major European countries such as Germany and Italy, as well as the possibility of excess supply. While Europe still accounts for a major share of demand for solar panels, other markets such as the U.S., Asia-Pacific and even Latin America are expected to gather momentum, and even spearhead growth in the global market over the next few years.
Continued policy adjustments, tightening incentive terms and uncertainty over the continuation of feed-in tariffs for solar installations in major European markets are fast shifting the market dynamics away from the region and toward other regional markets. Developing countries are emerging as torchbearers in the global solar power market. With a steady decline in the prices of PV power, mainly due to financial aid from developed countries and international organizations, solar energy is increasingly being used in various developmental activities such as education, water supply, and healthcare.
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Global Solar Panels Market to Reach $71.8 Billion by 2017
October 18, 2011