China has emerged as the dominant force in the region, growing by a blistering 500% over 2010 levels with 48% of 2011 demand. A planned year-end 13% FIT reduction led to a surge in Q4’11 installations, reaching 1.7 GW. Low factory gate module prices and favorable project returns led to a flurry of installations, while the project pipeline has now grown to 20 GW.
“The China PV market was reshaped in 2011 by the release of the national FIT,” said Ray Lian, Analyst at NPD Solarbuzz. “Approximately 1 GW ground mount projects were installed in the Qinghai province alone. However, the explosive growth could well be followed by policy adjustments in 2012 as the Chinese central government takes action to control the growth rate.”
In 2011, Japan was the second largest regional market in Asia Pacific, followed by Australia and India.
Japan Grew 30% in 2011, With Higher Growth Expected in 2012
Q4’11 installations in Japan were up slightly from Q3’11 levels, with residential segment having more than a 70% share of demand. The 2011 Japanese market was up 30% Y/Y, reaching 1.2 GW, and is poised to grow an additional 40% in 2012. Though the government recently approved a new FIT law aimed at spurring demand for large-scale PV projects, 2012 rates have yet to be announced. While the lack of clarity on the new FIT has held back execution on these projects, the new law has stimulated development activity. The market is also being reshaped by a dramatic increase in the number of foreign module suppliers.
Strong Growth in India, Despite Project Delays
Installations in India surged 125% in Q4’11, as project developers raced to meet installation deadlines that trigger during Q1’12. Though many of the approved projects are still facing delays, Q1’12 could see more than 600 MW connected to the grid under the National Solar Mission and Gujarat Solar Policies. Receiving a temporary reprieve from regulators, projects under the Gujarat Solar Policy were recently granted a one-month extension. In 2012, the Indian market could begin to approach 1 GW, fueled by new installations under the National Solar Mission and new state-level policies.
“While rapid PV price declines have greatly improved project economics over the course of 2011, many Indian developers have suffered setbacks due to difficulties associated with financial closure, land acquisition, and power evacuation facilities. Now developers will need to race to meet their installation deadlines or face the prospect of losing their PPAs, leading to a surge of activity in December and January,” added NPD Solarbuzz analyst Chris Sunsong.
Australia Shrinking as Incentives are Reduced
The region’s third largest market is trending in a different direction. Australia’s PV installations fell 10% Q/Q. Q1’12 installations are forecast to decline an additional 20%, as the market readjusts to the termination and reduction of a number of incentive policies in 1H’11. The FY’12 market is forecast to fall by 30%; however, the market is forecast to pick up in 2013 as large-scale ground-mounted systems begin to come online. The retrenchment of solar PV incentive policies across the country has left many downstream installers stranded with evaporating demand and many firms have ceased operations. While the availability of low-priced Chinese PV modules has led to rapidly decreasing installed system costs it also led to Silex Solar ceasing all manufacturing activities during Q4’11.
Other emerging markets in Asia accounted for an additional 500 MW of demand in 2011, largely driven by Thailand, Korea and Taiwan. This figure is expected to increase by more than 50% in 2012, along with the emergence of new markets in Malaysia and the Philippines. The latest Asia Pacific Major PV Markets Quarterly report brings together a comprehensive and detailed analysis of regional trends, major country market analysis, and developments in smaller country markets. PV market activity over the 12 quarters of 2011-2013 in the Major markets of China, India, Japan and Australia is covered in terms of market drivers and constraints, market segmentation, policy developments and their impact on the market, downstream trends, major project activity, installed system pricing and PV project investment economics. The Smaller Country analysis covers new developments in the past quarter in Thailand, Malaysia, Taiwan, and South Korea. The new Asia Pacific Major PV Markets Quarterly report comprises a 150-page PowerPoint report, an Excel data summary, and PolicyTracker, a comprehensive Excel-based database showcasing each country’s incentive policies.
