The global solar energy market is set to soar this year as project costs plunge and countries boost investments in cleaner sources of electricity. New solar photovoltaic (PV) installations will reach 55,000 megawatts this year -- the highest annual total to date, researchers say.
The installations mark a 36 percent jump over 2014 installations, which grew by just 2 percent compared with the previous year, GTM Research found in a Wednesday solar market report. By 2020, global PV installations could jump to 135,000 megawatts for the year, researchers said -- enough to power the equivalent of roughly 20 million average U.S. homes.
Fueling this year’s growth is the dramatic drop in solar costs. Panel prices are down 75 percent since 2009, while the electricity produced by large-scale projects costs less than half of what it did just five years ago, industry statistics show. At the same time, governments and corporations are turning to solar, wind and other clean-energy sources to reduce emissions of harmful greenhouse gases and fight climate change.
China will drive more solar PV growth this year than any other country, GTM Research said. The Chinese government recently adopted a “feed-in tariff” incentive program and set a goal to install 100,000 megawatts of solar projects by 2020. Researchers forecast that China will install 14,000 megawatts of solar PV this year -- short of China's 2015 target of 17,800 megawatts.
The United States will rank third this year for solar PV growth, behind Japan and China. U.S. installers will add about 8,000 megawatts of solar PV capacity, a nearly 30 percent jump above 2014 levels, the report found.
In the U.S. alone, one in three investors say they will invest in solar for the first time this year, according to a survey by Wiser Capital, a financial services firm, released Tuesday. About 20 percent of investors surveyed said they had already invested in solar this year, while more than 60 percent said they plan to make investments in solar a priority in the next five years.
Emerging markets in Latin America, Africa and the Middle East will likewise see demand for solar projects climb in the next five years. Installations in those regions will rise from about 1 percent of annual electricity demand to 17 percent by 2020, Adam James, a solar analyst for GTM Research said. Such growth will signal a “profound change in the global landscape” for solar projects, he said in a statement.