PV Market Trend

 A new world order

It is clear from the results of 2012 and the forecast for the coming years that Europe’s leading role in the

PV market is coming to an end. In 2011, Europe accounted for 74% of the world’s new PV installations;

in 2012 this number was around 55%. In 2013 it is almost certain that the majority of new PV capacity

in the world will be installed outside of Europe. Part of the reason for the decline in Europe’s numbers is

a natural cooling down period after very strong growth in the previous two years. To be sure, there are

still markets in Europe which have strong and still-untapped potential and room for significant PV growth.

But this will occur at a more stable – and sustainable – rate than it has in the last few years. Going

forward, the driving forces will be in countries like China, the USA, Japan and India. The PV market is

becoming truly global.

 Increasing competitiveness

PV markets in Europe and around the world continued making rapid progress in 2012 toward

competitiveness in the electricity sector. The strong price decreases of PV technology, and increased

electricity prices in general, have helped drive momentum toward what is often called “grid parity”.

The moment is near when the savings in electricity cost and/or the revenues generated by selling PV

electricity on the market could be equal to or higher than the long-term cost of installing and financing a

PV system. This so-called “dynamic grid parity” appears within range in several EU countries, and has

been reached already in some segments of some countries. In most countries, PV market deployment still

depends on the political framework in place. Various national schemes – whether they are being introduced,

modified, or phased out – have a significant influence on EPIA’s forecasts and scenarios as they have

serious consequences on national PV markets and industries. As shown by the substantial regulatory

changes introduced by policymakers in several countries in 2012, dedicated financial support as the main

driver for PV development is progressively vanishing. In the coming years, deployment strategies will

depend much more on the capacity of PV power to actively participate in the electricity system.

 PV in the electricity mix

For the second year in a row and the second time in history, PV in 2012 was the number-one electricity

source in the European Union (EU) in terms of newly installed capacity. PV now covers 2.6% of the

electricity demand and 5.2% of the peak electricity demand in Europe. As a result, it is already

starting to have an effect on the structure and on the management of the electricity system. Grid and

market integration challenges will therefore shape, much more than in the past, the capability to develop

PV markets in the coming years.

The factors lined up against the continued strong growth of PV in Europe and around the world are

formidable: a continuing economic and financial crisis; industry consolidation; a global market

rebalancing; political and regulatory instability as governments reconsider their commitment to renewable

energy sources and climate-change mitigation. But even in the face of all of this, the following report

shows how, under the right conditions, the prospects going forward for solar PV – a clean, safe and

infinitely renewable power source – remain solid.

The main questions are how and where continued PV growth will occur, and how committed

policymakers are to making it happen.

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