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Report Anticipates 220 New Gigawatts of Distributed Solar Generation by 2018

A recent Navigant Research report anticipates that the world will add 220 new gigawatts of distributed solar photovoltaics by 2018 as solar comes into parity with other energy sources, creating $540.3 billion in revenue in the process. That’s a significant jump in the amount of solar that is currently installed throughout world, which the European Photovoltaic Industry Association (EPIA) said reached 100 gigawatts at the end of 2012. 

In recent years, much of the growth in solar is attributable to the giant PV projects being installed to meet utility demand in certain markets. The Navigant report anticipates that just the distributed generation projects — or projects under 1 megawatt in size — being installed over the next five years will more than double the world’s total solar capacity that is now online.

“Used in applications ranging from residential to small commercial to industrial settings, distributed solar generation offers significant benefits to consumers while adding resiliency to an electric grid evolving beyond the traditional centralized model,” says Dexter Gauntlett, research analyst with Navigant Research. “Though this market is still primarily driven by government incentives, distributed solar PV will continue its steady march toward grid parity in major markets over the next few years.”

The report anticipates that the solar market is transitioning from one that relies on a financial and engineering model (based on the wants and needs of utilities to own or source electric generation from large projects) to a more diverse model. Under the emerging model, both the sources of generation and the ownership of the generation assets will be more diverse, include third-party financing from companies like SolarCity and SunRun and other new financing mechanisms. These changes will partly be driven by some of distributed solar’s advantages, which include generating electricity onsite to offset the need to build new transmission capacity while avoiding line losses, according to Navigant.

Navigant also finds that the growth will occur as both PV modules and the balance of systems costs (i.e., soft costs and other costs not related directly to the modules and inverter) continue to fall, driving the installed costs of PV to between $1.76 per watt to $2.74 per watt throughout the world. “At this price, solar PV will largely be at grid parity, without subsidies, in all but the least expensive retail electricity markets,” it says.

The report also notes that feed-in tariffs and commoditization of PV modules are driving growth in PV markets worldwide. “Ultimately, it is a great time for consumers and end users to purchase or lease distributed solar PV systems as prices continue to fall in the middle of fierce competition and continued consolidation,” according to Navigant. “Moreover, the Asia Pacific and the rest of world (Latin America, the Middle East, and Africa) markets are expected to see dramatic growth during the forecast period that will offset slowed growth in European and U.S. markets,” it adds.

The original article was posted on the SolarReviews blog


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