Solar Shines On Asian Growth
Asia Pacific photovoltaic markets are poised to make a significant contribution to global photovoltaic (PV) market growth in 2010 following improvements in the policy environment in most of the key countries in this region. According to the Solarbuzz Asia and Pacific Major PV Markets 2010 report, the key emerging country markets of China, India, South Korea and Australia, together with the long established Japanese market, contributed 0.9 GW of installations in 2009, or 12% of world demand. After a policy-led reduction in demand in South Korea last year, all five of these country markets are now expected to return to growth in 2010. According to data in the new Asia and Pacific Major PV Markets 2010 report, demand across the three countries will be up 85% this year in the mid-case Green World scenario.
"Japan is set for very strong growth in 2010 with clearly set out new incentives for photovoltaics," said Craig Stevens, President of Solarbuzz. "The expectations for China and India remain high. However, their challenge will be to translate their long pipeline of projects, now just on paper, into reality through government incentive policies that are certain and at a level high enough to attract financing."
For the first time in three years, the Japanese market showed a significant increase in 2009. The domestic market more than doubled in 2009 to 477 MW as a result of the re-launch of a nationwide residential incentive program and the introduction of a Japanese version of a Feed-In Tariff (FIT) during the year. The FIT was originally planned to launch from April 2010, but to further accelerate the deployment of the domestic PV market, the government pushed it forward and started the program in November 2009. In addition, as of December 2009, over 400 regional governments (prefecture, city, town or village) offered residential PV support programs, including subsidies and loans as well as utility buy-back schemes and further assistance through utility Green Power Funds.
With the help of Solar Rooftops and Golden Sun programs in mid-2009, the PV market in China experienced strong growth, achieving 228 MW in 2009, an impressive 552% Y/Y growth. The growth was driven by the emergence of a significant on-grid segment, building-mounted and ground-mounted systems supported by specific government programs, with the largest provincial markets being Ningxia and Jiangsu. Specifically, on-grid building-mounted segments rose from a 33% market share in 2008 to 88% in 2009. As of June 2010, a total of 95 listed projects that are under development with National Energy Administration approval totaled 18.6 GW with more tender bids pending.
The India PV market grew 22% Y/Y, reaching 44 MW in 2009. Despite this, the growth was lower than expected, with incentive programs lacking success. The Ministry of New and Renewable Energy (MNRE) released its National Solar Mission, outlining planned growth of the PV market to 20-22 GW by 2022. While the global financial crisis had a moderate affect upon government funds allocation, national elections during 2010 slowed several government bureaus to a halt, delaying procurement and distribution activities until later in the year. Nonetheless, the project pipeline stands at 4.9 GW at June 2010.
South Korea's PV market decreased in size by 65% falling from 276 MW in 2008 to just 98 MW in 2009. With over half of the aggregate 500 MW program cap reserved in just the first few months of launch for a program initially designed to ramp up steadily through 2011, the Ministry of Knowledge Economy (MKE) was forced to establish an annual installation cap. This caused the collapse in installations. Additionally, in September 2009 the FIT rates were adjusted downward for the 2010-2011 period to reflect falling module prices and encourage greater numbers of smaller, building-mounted systems.
Consumer demand in the residential sector drove Australia's PV market in 2009, growing 222% Y/Y to 74 MW. Specifically 80% of all capacity installed was for on-grid residential use. As the majority of Australia's electricity is produced with cheap coal, PV market growth in recent years was steady, rather than explosive. The Australia government revised its Solar Flagships program—aiming to commission 150 MW of PV power by 2015. In addition, every region has, or will have, a PV-specific FIT or net-metering policy in 2010.
