This year could see a reckoning for ultra-mega PV projects

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From pv magazine International.

This year will determine whether big really is beautiful in the PV world. That is one of the conclusions drawn by energy research company Wood Mackenzie in its Global Solar PV Markets – Top 10 Trends to Watch in 2019 report, published this morning.

With the majority of the trends highlighted positive ones – excepting, perhaps, the adoption of PV by the world’s fossil fuel giants – the analysts sounded a note of caution about projects of at least 500 MW capacity, with India a big player in the segment.

The report’s authors cite the failure of the Solar Energy Corporation of India’s 10 GW solar-plus-manufacturing procurement exercise last year as symptomatic of the difficulties involved in bringing such ambitious projects to fruition. The report notes 14.7 GW of mega solar projects – out of a global pipeline of 63 GW in India, China, the Middle East and Australia – are due to enter construction this year.

With fewer than 10 GW of mega projects in operation worldwide to date – half of them in China – Wood Mackenzie analysts predict the success or failure rate of the biggest PV projects due to break ground this year will be indicative of the future of such grand schemes.

The report also predicts increased merger and acquisition activity in the Indian solar market as a result of the wafer thin margins for developers forced to tender ever more competitive solar tariffs through the reverse auction process. Trading of projects and consolidation is highlighted in the report as another example of PV entering the investment mainstream, after the year started with announcements by U.S. tech companies of a desire to embrace solar.

China’s influence waning

After a year of turbulence for global solar, new capacity installations will break the 100 GW barrier for the first time in 2019, predicted the consultants.

The Scottish research company has forecast 103 GW of new PV will be installed in the next 12 months, as the sector rebounds following figures which showed last year was the first in which new capacity additions failed to rise year on year.

The Edinburgh based consultancy has predicted the world will continue to wean itself off a dependency on China which, although it will remain the world’s top dog for some time to come, will see its share of global installed capacity fall from the 55% seen in 2017 to around 19% by 2023. Analysts predict Saudi Arabia, Iran, Egypt and Italy will be the world’s fastest-growing solar markets this year.

And another landmark will be set in the final three months of 2019, according to the report’s authors, with more than 30 GW of new solar anticipated for a quarterly record, as regional markets in Latin America, the Middle East and Africa continue to expand.

Falling costs, higher efficiencies

The continuing decline in global solar costs could see the price of PV power fall as low as $14/MWh (Rs 1,000)  this year, under optimal conditions, with Wood Mackenzie highlighting the potential for record low prices in this month’s twice-delayed Mexican solar tender and in the 2.25 GW procurement expected in Saudi this year, on the back of a further 15% fall in global solar costs.

The price fall is set to go hand in hand with increased efficiency rates as the share of mono PERC cells in solar manufacturing output rises from 36% last year to 41%, according to the analysts, who also predict increased rollout of bifacial modules, particularly on desert sites, helped by a blended global average module price that could fall to $0.25/W.

The report speculates about whether the U.K. government’s decision to close its solar FIT subsidy will be rewarded with a subsidy free market to follow in the footsteps of Spain, Portugal and Italy. The U.K. has 2.3 GW of solar projects awaiting planning permission in the post-FIT regime and developers are likely to target corporate offtakers for a British solar price nearing a competitive £40/MWh (Rs 3,688).

Corporate solar gold rush

The advance of solar-plus-storage in the U.S. will herald more capacity additions this year, according to the analysts, after Hawaii recently saw prices as low as $78/MWh for such schemes – although citing the acquisition of 567.5 MW of solar-plus-storage by PG&E appears awkward given the historic utility’s much publicized financial troubles.

And the researchers even appear optimistic about the world’s politicians, pointing to China’s recent grid parity announcement and a more ambitious renewable energy target of 58.7 GW by 2030 – some 40 GW of it solar – for Saudi Arabia. On the latter point, highlighting the enthusiasm shown by fossil fuel majors to use PV to fire oil and gas as well as mining operations is hardly likely to fill environmentalists with joy, but Wood Mac offers hope from Europe’s policymakers.

EU member states – and heaven knows whether that will include Britain – are due to announce their National Action Plans for renewable energy this month, with the political bloc to ratify them by the end of what could be another bright year for solar.