Reductions in feed-in tariffs and other subsidies in major European markets have generated a negative sentiment for photovoltaic (PV) installations this year; however, market research firm IMS Research has forecasted solar PV growth globally for 2012 due to bullish performance in emerging markets. IMS has estimated that global installations will hit 27.8GW to 32.6GW in 2012, which is an uptick from its original forecast of 26.9GW.
There has been increasing growth of PV outside of Europe, especially as energy prices rise globally due to the escalation in crude oil. According to IMS, at least 23 countries will install 100MW or more this year, which is approximately a 25 percent increase versus 2011.
Germany, Italy and France have all cut subsidies this past year, while Spain underwent major reductions in recent years as well. This has led to negative external ramifications, which have clouded the overall market. Many companies with predominantly regional sales focused on Italy and France have closed up, while falling solar panel prices world-wide due to oversupply have led to the demise of many manufacturing based operations. Solar PV installations in Germany are not expected to decline sharply from 2011 levels, since falling module prices globally will likely offset the lack of government incentives, lifting capacity levels above 6GW for 2012, according to several analyst firms. While Germany is anticipated to retain its top position in total solar PV installations, China is closing in on the number two spot for the year.
China is a true wild card with respect to global supply and demand levels. With European demand falling, the Chinese government is under increased pressure to accelerate domestic deployment to support its large manufacturing base and counteract the reduction in demand. Thus, the Chinese government is pursuing demand creation via feed-in-tariffs and rebate programs that will facilitate an increase in their domestic green energy supply. According to Solarbuzz, China installed 2.75GW in 2011 and is expected to double that capacity in 2012 to 5GW with 25GW in the overall solar PV pipeline for future development.
It is a sharp contrast to its initial agenda in the solar market which has been mainly manufacturing oriented, as the country strived to avoid global commitments to reducing greenhouse gas emissions. In any respect, the country is much more capable of installing domestically manufactured solar modules unlike the US, which imports the majority of its cells from China.
In the US, the state of Arizona has been actively marketing itself as the next solar capital of the world, but it still has a long way to go, especially since it does not possess any significant solar cell manufacturing. However, it has taken small steps in creating a stronger solar PV presence. Recently, the Arizona Public Service (APS) and the State Land Department have announced a new partnership to develop the 35MW Foothills Solar Plant on 400 acres of Arizona State Trust Lands in Yuma County. This will be the first solar project approved for construction on state-owned trust lands. APS has acquired the land on a 35-year lease at an estimated cost of $10 million and will finance, own, and operate the site, which is expected to reach full capacity by the end of 2013. Under the Arizona Sun Program, focused on providing savings and tax breaks to solar developers, APS is allowed to develop up to 200MW of solar projects.
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