Business, Sustainability

Solar Can’t Grow Without Policy Support

Solar power generation facility
Photo: Shutterstock

Solar may be the hottest thing when it comes to green energy, but according to analysts at IHS Markit, in order for it to really develop in Europe, it needs policy support. Though there are plans afoot to build ground-mount solar photovoltaic (PV) capacity in several countries, they can’t go ahead without some government buy-in.

IHS Markit, the company studying the current state of solar energy support, is a global business information provider based in London. Its board of directors consists of Bill Ford of General Atlantic; Dinyar DeVitre of General Atlantic; Robert Kelly of Saint Mary’s University; Richard Roedel, CPA of Luna Innovations; Ruann Ernst, Ph.D, of IHS Markit; James Rosenthal, J.D., of Morgan Stanley; Deborah McWhinney of Fresenius Medical Care; Jean-Paul Montupet of WABCO Holdings; Balakrishnan Iyer of Philips Semiconductors; Board Chairman and CEO Jerre Stead; and President Lance Uggala.

According to IHS Markit, there are currently more than 8 gigawatts (GW) of solar PV projects under development, and all of these have received grid-connection permits. Unfortunately, the majority of them have not gone beyond that stage.

Spain, for example, recently announced plans for a power tender that could include up to 2 GW of solar power. Approximately 2 GW worth of grid-connection applications have been filed in Portugal, and Ireland has 3 GW of solar projects in the permitting process.

According to IHS Markit senior analyst Josefin Berg, although the demand for ground-mount solar PV capacity is expected to decline by 40 percent in 2016, it will recover after 2018 due to an increasing demand for solar energy in untapped markets.

However, in order for solar suppliers to be able to meet the anticipated demand, governments will need to support the manufacturers’ investments with tools such as fixed-rate power purchase agreements and incentive schemes.

Ireland is planning to put an incentive program in place to support ground-mount PV system capacity in that nation, but few details about the exact nature of the incentives have been released. If the incentive scheme is attractive to developers, IHS Markit anticipates that there will be a surge in construction activity.

Berg wrote, “As we have seen in other countries in the past, these planned projects could be installed very quickly, as soon as a regulatory framework can ensure sufficient revenues for investors.”

IHS Markit also recently released its PV Module Supplier Scorecard, addressing a need for a holistic review of the PV module supplier base, another crucial element in the ability to expand the solar power grid in Europe and beyond. Trina Solar scored highest in market presence due to its leading global market share, completeness of its product offering, strong position in all major regions, and brand perception.

Other firms that ranked high on the PV Module Supplier Scorecard were SunPower, First Solar, Hanwha Q-cells, and Jinko Solar. Each of these companies won above-average scores for market presence and market momentum.

The PV Module Supplier Scorecard results reward companies that are well established in a wide range of markets, with strong brands and strong financial results, and that are well positioned for growth in the future.

There is an increasingly strong field of companies that supply PV modules and other components necessary to produce solar energy, as evidenced by IHS Markit’s list of top suppliers. However, a deeper analysis of the market indicates that without the necessary policy support, the solar energy supply may not expand quickly enough to meet anticipated demand.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s