Germany currently represents roughly half the total global market for solar components – all thanks to explosive growth it fueled over the past decade through attractive solar subsidies. But that country is now dialing back its subsidy programs, and solar companies will be scrambling to find the next big growth market for 2011 and beyond, says a new report from market analytics firm Lux Research.
Lux researchers reviewed the subsidy and regulatory structures for 15 markets and tried to figure which of them are most capable of fueling future demand as Germany’s star fades. Cyprus, Israel, and Malaysia figure to be fast burners, Lux says. But though these markets offer some of the most valuable subsidies, they all face fundamental limits on the extent to which solar can grow. Cyprus in particular cannot support more than a few hundred megawatts of solar installations, while Israel and Malaysia are capped close to 3 GW.
India stands out as a promising market for solar, but South Africa and the U.K. could also be fat growers, Lux says. India combines a heavily-funded subsidy scheme with a grid in great need of distributed generation and huge projected electricity consumption. South Africa has a significantly more attractive subsidy scheme but is limited to utility-scale applications and faces regulatory uncertainty. The U.K. has a comparatively weak solar resource, but faces tight natural gas supply, has a broad set of feed-in tariff (FIT) incentives, and boasts a potential market size over 20 GW.
Russia, Brazil, and Mexico are all moving slowly in solar, says Lux. All offer huge electricity markets with over 10 GW of solar development potential, but lack incentive schemes. Brazil canceled an FIT policy early last decade, yet is one of the markets closest to grid parity and offers massive potential demand. Mexico has enforced a national net metering policy, making it a likely future champion of solar as a distributed resource. Meanwhile, Russia offers few demand drivers in 2011, but the largest potential addressable solar market at over 80 GW.
Lux makes the full report available to its subscribers but details are available here: https://portal.luxresearchinc.com/research/document_excerpt/7293