DEMAND BETTER THAN PARITY FOR SUN

The Race To Grid Parity: Which Countries Will Enjoy Cheap Solar First?
18 August 2011 (Solar Industry)

"Solar subsidies have been capped, cancelled and cut over the past several years, but solar installations have continued to rise…[BUT] as manufacturers approach near-term limits on cost reductions, German demand will begin to decline…[and] demand will shift to Asia and North America...[The] solar market will grow [from 15.8 GW in 2010 to 37.5 GW in 2016, a compound annual growth rate of 15.5 percent, one report found]…but revenues will stay flat as price declines outpace volume growth.

"…[S]olar demand will shift to a broader range of markets over the next five years, based on an analysis of the levelized cost of electricity (LCOE) and internal rate of return (IRR) across 156 countries, states and regions. Japan, China and India will emerge to drive significant volumes, and the U.S. will come forth as a heavyweight, given the government's support of tax equity through 2016 and a myriad of state-level programs…"

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"…Today, the most attractive residential markets are Australia (52% subsidized IRR), Greece (32%) and Ontario (27%), while the most attractive commercial markets are New Jersey (42%), Portugal (37%) and Hawaii (34%)…On the utility ground-mount side, Portugal (81%) tops the list, followed distantly by New Jersey (58%) and Cyprus (44%). By 2016, viable investment targets will increase dramatically, encompassing 45 residential markets, 88 commercial markets and 85 utility markets.

"Subsidies and grid parity are not necessary to generate positive demand...An anticipated future increase in the cost of retail and wholesale power is all that is necessary…[O]f 55 geographies demonstrating unsubsidized IRRs above 10% at the end of 2016, only 10 will have reached grid parity…"