China solar market forecast analysis: 2018 or contraction

This year's global solar market may have something that has never happened before: contraction. According to Bloomberg New Energy Finance's most conservative scenario, which was simulated in Monday's report, the total solar installations in 2018 may reach 95 GW, down 3% from the same period last year.

This potential decline demonstrates the impact of China's solar demand on the global market. The country decided in June this year to impose restrictions on new installations this year. This could lead to oversupply of global panels and reduce prices to 24.4 cents per watt by the end of the year. In turn, cheaper panels may trigger more demand, and it is expected that the market will rebound next year.

Despite the policy headwinds in China, it seems that the global solar market will eventually grow in another year, although this is only a very slight increase. “The new report forecasts show that China’s global relevance will decline, and by 2020 it will account for only a quarter of global demand, down from more than half of 2017.”

Although the most conservative BNEF model indicates that this year's installations may decline, the basic forecast indicates that the global new solar installations are likely to remain unchanged. The most optimistic forecast shows an increase of 104.3 GW.

This year, one of the highlights of solar energy is Japan, where the government continues to provide feed-in tariff subsidies to projects below 2 MW. However, it may take a while for the developer to protect the site and approve it to connect to the grid.

Until the end of 2020, the increase in solar capacity may not be obvious.