India To Become 4th Biggest Solar Market

The demand for solar panels will increase by a sharp 34% to 77 GW in 2016 powered by massive demand from China as well as low prices that is fueling demand growth in other parts of the world as well. With strong government support, India will become the 4^th largest market growing its overall solar panels installation by more than 150% to 5.8 GW in 2016. The country will become the 3^rd largest market in 2017 overtaking Japan with a forecast of 8-10 GW of solar panels installation. China will continue to be the largest market. While the country is being rumored to lower its installation capacity to just 110 GW by 2020, as per IHS, the country will install 169 GW which implies an annual demand of 25-30 GW.

The lower prices of solar systems has made it the cheapest form of energy in a large number of places. A recent Bloomberg study found solar energy has become equal/lower to wind energy in most of the emerging countries. With rapid technological development and increasing scale, solar energy should see its costs and prices continue dropping. This means that solar energy will keep growing even as the governments around the world reduce their subsidies and support. While the new Trump administration is not particularly pro-solar, the super low prices of solar energy means that it can compete on its own. Also the change of the ITC will not be easy given that it has bipartisan support in the USA Congress and Senate.

The biggest variable in 2017 on the growth of solar energy will be the change in the Chinese FIT which will determine the overall demand emanating from that country. China plays an out-sized role in the solar demand and prices these days given that almost 40% of the global demand in 2016 will be accounted by the Middle Kingdom alone. While USA and India are also important end markets, China dwarfs others in terms of absolute installations.