Solar PV market forecast and major trends

Leading solar photovoltaic (PV) market researchers are predicting a growth in global PV demand in the next 4 years along with rapid technological change

After a 7% slow down predicted in 2017 in global PV demand, market researchers forecast that solar power will be back on a path of growth in the following 4 years. A cumulative forecast 2016 – 2021 of 506 GW with a 9% CAGR (Compound Annual Growth Rate) leaves space for optimism in the industry’s future.

Global PV demand registered a 20% growth in 2015 and a 34% growth in 2016, with the global utility–scale market being the primary driver in the last year, with residential growth mainly concentrated in Japan, US, Germany, Australia and the UK.

In 2016 China, US and Japan made up 66% of the 66GW market, with China being the number one market in the world, the US number two and India looking set to become one of the more interesting markets in the future, forecast to overtake Japan to become the third biggest market by 2018.

So what are the market trends?

Forecasts predict that solutions, systems and products associated with the “Balance of System” part of a PV plant, where ABB has one of the widest portfolio in the market, will experience a 37% cost reduction over the next 5 years and during the same time 1,500V DC will become the new standard for systems producing more than 1MW with integrated energy storage systems (ESS) also becoming a fast growing trend.

These points are relevant for ABB, as we already offer 1,500V DC dedicated products (link) and a specific range of solutions, systems and products for ESS applications (link). Furthermore, with project types in 2016 shaking out at 56% utility-scale systems of over 5MW and 15% large industrial systems of between 1 and 5MW, ABB is poised to become one of the major players in the market. For completeness also note that in 2016, 16% of project types were commercial PV systems between 20kW and 1 MW and 14% share were residential PV systems (<20kW), two additional areas in which ABB shines.

Talking specifically about the 1,500V DC trend, the overall 1,500V DC PV market is expected to grow from 14MW in 2014 to 96GW in 2020, where 92.7% of all projects over 1MW will be at 1,500V. Leaders of this changing trend will be the US, followed by India and the Middle East and the transition will be quick, since the value proposition is proven and the supply chain is well established. Confirmation of this trend is illustrated by the fact that as of December 2015 all 1,500V PV system components were commercially available in the marketplace. The main driver for this change is that the number of components needed to produce the same power at 1,500V versus 1,000V is significantly reduced:

  • Combiners: – reduced by 33%
  • PV Inverters: – reduced by 40%
  • Cables, Conduit: – reduced by 40 to 45%

Furthermore, it is expected that all introduced or newly announced utility inverter products will be suitable for 1,500V.

Another relevat trend in PV applications is the shift away from central inverters towards high-power string inverters. The power rating of string inverters is predicted to increase steadily in the coming years for systems of 20MW and below. String inverters will need to be developed for 1,500V DC to increase power output and to justify the slight price premium for string inverters versus central inverter solutions. The final effect will be an increased power rating, with fewer required inverters for a given installation, faster installation times and reduced total costs.

What this means to ABB?

The bad news is that the use of string inverters reduces the need for DC Combiners (link) because the inverters are coupled on the AC-side of the plant. The good news is that, depending on the plant size, multiple levels of AC combining could be required and they would be similar to panelboards, switchboards and switchgear that are commonly used today in standard distribution systems. In addition, traditional panel builders will have more access to solar opportunities for the low-voltage side of the transformer, making it more beneficial to package the LV and MV equipment together, taking advantage of the strategic reorganization in ABB at the start of 2016, which brought LV and MV products and solutions together into ABB’s Electrification Products division. This is a move that brings one of the industry’s most complete ranges of LV and MV products and services to a broader customer base.

(Sources: GTM Research, IHS Technology)

Useful links:

Low-voltage products for solar power

Solar inverters

Medium-voltage solutions for solar

Solar power solutions

This blog was written by four authors

Marzio Zambetti (Profile at the top right of blog – there was only room for one author here, but my colleagues below also contributed to this blog)

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Amber Fleming

I joined the ABB Solar team in June 2015 and have thoroughly enjoyed immersing myself in this exciting and growing segment ever since. As an electrical engineer, I started my career in R&D and eventually decided it was time for a change. I enjoy getting out to meet with customers and learning about their challenges, which in this segment, it is always changing. It is especially rewarding when they are kind enough to consider me a part of their team; working together, creatively, to come up with a solutions for tomorrow’s problems. The innovation never stops and this is what makes “working” in Solar fun.

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Aravind Ramachandran

I am the Global Segment Marketing Manager responsible for the solar business within Electrification Products division based in Milan, Italy. I have been active in the solar business since the end of 2014 and in total have 15 years of experience in Sales and Marketing. I like the challenges and trends in the solar industry and now I am working closely on developing solutions with string combiners for Solar PV installations both DC and AC. I enjoy travelling and meeting new people and exploring different cuisines. I play tennis as my favorite pastime and other sports.

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Federico Mai

I joined ABB in 1997 and have been in charge of EP division Solar industry Marketing Communications since ABB decided to enter this exciting market in 2006-2007. I believe in renewable energies and I’m a fan of electric vehicles because I’m convinced that both are the only way for a sustainable future. And it seems that now is the time for this great change to take place for the whole of mankind!

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About the author

Marzio Zambetti

I joined ABB in 1996 where I worked for the Breakers and Switches business unit within the EP division. I’m based in Bergamo, Italy, and I’m responsible for the Wind and Solar market segments. My management experience includes international sales, product development and product marketing.
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