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Will global solar demand growth drop to 10% in 2016?

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Global solar demand growth

IHS has predicted that solar demand growth in 2016 will drop to 10%, to around 65.5 GW up from around 59 GW in 2015. This means that the global demand growth will drop to 10% from around 33% now (global demand was around 40 GW in 2014). This is quite a drastic drop in growth rate considering the fact that solar energy is becoming more cost competitive with each passing day. Large scale utility solar has already started to compete with utility scale gas and coal in many parts of the world, with long term PPA prices of 4-7 cents/kWh being seen without any attendant environmental concerns. But I think that IHS is being a tad conservative in estimating the solar demand next year. While China and Japan have pretty much reached their upper limits of annual installations (though they may continue to show slow growth rates), USA and India will have a bumper growth year. USA because of the danger of ITC expiration will be looking to install like crazy to get the tax benefit, while India will see the completion of many solar power projects that are being tendered now. Other parts of the world should also show strong growth, as solar energy becomes competitive with retrial grid prices. I think ~70 GW would be a more feasible figure than the 65.5 GW figure being quoted.

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2017 will be another story. While India will continue its ~100% growth rate and become a ~10 GW market, USA will show a sharp drop as the 2016 demand pull in starts to show its effects. There will be a decline in demand from both utility and rooftop solar segments. In fact 2017 may be the slowest year on record similar to 2012-2013, when demand fell as Germany drastically cut its subsidies.

Solar panel prices should keep declining in my view (it is already 50 cents /watt in India and China). This is mainly due to the fact that large Chinese manufacturers are managing to lower costs by 10% every year. These companies will keep cutting prices in order to win marketshare from each other, leading to a global decline in prices. 2016 end and 2017 may see a sharper cut in prices due to slowing demand. However the days of 18 GW panel sales in quarter have come and are unlikely to go away anytime soon.


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

One Response so far | Have Your Say!

  1. sridhar

    Hi , Could u suggest some stocks related to solar energy in India? Stocks like Moserbear does look very bad for investment. Your guidance is appreciated on pointing out few stocks.