By Kari Williamson
The region's solar PV market is poised to grow further with an additional 45% in 2012, as Asian governments introduce new installation targets.
China's National Energy Administration has already revised its official cumulative solar installation target up from 10 GW to 15 GW for 2015. China is projected to account for 45% of regional demand in Q4'11 and is on course to surpass both the US and Japanese market sizes in 2011, the analyst says.
Elsewhere, regional solar PV demand is being driven by national incentive programmes in India, while Japan is also growing rapidly ahead of its new feed-in tariff programme. Other emerging markets in the region such as Taiwan, South Korea, Thailand, and Malaysia are projected to deliver a combined 700 MW of additional solar PV demand in 2012.
Non-residential solar PV leads
Non-residential ground mount solar PV systems are projected to account for 64% of the regional market by Q4’12, up from just 16% in Q1’11. This share growth will come at the expense of the residential segment which falls from 58% in Q1’11 to just 20% by Q4’12, NPD Solarbuzz preducts.
Internal rates of return (IRRs) on PV systems in the four major markets will build over the next four quarters, ending 2012 at levels between 10% and 13%, as system prices drop faster than incentive rates.
Constraints and access issues
Market constraints and downstream access issues exist in most countries in the region. In China and India, financing, land use, and regulatory issues are a significant barrier to large-scale solar PV projects.
India’s market is being shaped by domestic content requirements, while China’s State Owned Enterprises (SOEs) account for more than 50% of the 16 GW Chinese solar PV project pipeline.
In Australia, policy disruptions have already forced many downstream players into liquidation. In contrast, a building international presence in the Japanese market is evidenced by a steady build in solar PV module imports from just over 5% of the market in Q1’10 to a short-term peak of 21% in Q1’11.
“As the European markets no longer present certain growth, the Asia Pacific markets are increasingly the focus of international companies looking to expand. Companies seeking to take a share of this growth still face significant hurdles to define strategies to successfully access the downstream value chain,” says NPD Solarbuzz analyst Christopher Sunsong.
“These challenges, though, are unlikely to deter their determination to participate given the potential of this new regional market opportunity.”