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USA, China and India could power 93% of incremental Solar growth in 2016

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USA, China and India to be big solar markets in 2016

With the new year starting, global solar forecasts are coming in thick and fast. Forecasts have remained highly unpredictable as this disruptive technology has seen costs coming down much faster than expectations, leading to greater demand. 2015 ended with 59 GW making it another record year, in terms of solar PV installation and an almost 700% increase from 2008 annual demand. This shows the exponential growth in solar PV industry which has grown to more than $100 billion now. 2016 promises to be another double digit growth year with GTM predicting a 10% growth. However, IHS has projected a 17% growth to 69 GW. 93% of the demand will come from just three countries India, China and USA.

USA is set to see growth in installations by almost 5.3 GW and will account for a major share of the increase, followed by India and China. I still expect China to be the No.1 in terms of absolute demand, however growth will slow as capacity has reached a high level. India should see a big jump not only in 2016, but also in 2017 and should be the main driver of growth going forward.

In terms of cumulative capacity, China has become the No.1 country overtaking Germany which has now become saturated with solar energy and is growing by around 2 GW a year. Japan and USA will become the No.3 and No.2 countries as they continue to install around 10 GW of capacity. There will also be rapid growth in a number of smaller markets around the world, particularly in Asia and Latin America. Brazil should see high growth given the country’s high electricity tariffs and recent governmental support. Even South Africa should see long term sustainable growth given the country’s increasing power demands.

IHS also sees stable pricing going forward with ASP expected to fall by only 5% in 2016 as compared to 2015, since there will be lesser competition and steadier capacity growth. I think that the days of high double digit declines in solar prices are long gone and the industry will see a more gradual decline in prices. The larger players have consolidated and are not going for crazy capacity expansions, which will lead to supply gluts. The major risks are a big Chinese hard landing which has secondary effects in other countries.

With continued strong PV demand expected in 2016, IHS said it expected more stable PV module pricing with ASPs declining less than 5%, the smallest year-over-year decline recorded by the market research firm. 


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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