Expanding solar market encounters sluggish progression
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The global solar energy market, which has witnessed fantastic growth in the previous years, is projected to continue its expansion at double-digit rates in the upcoming years, as per industry predictions [1]. However, it's not projected to hit new record highs in installations soon, according to consistent forecasts from BSW Solar and Solar Power Europe [1]. Worldwide, expect the addition of over 600 gigawatts of new solar installations this year [1], nearly double the amount installed in 2022.
Germany, despite its small size, has found a spot among the top international players in the solar market [1]. According to a BSW Solar analysis from last year, Germany had a total installed capacity of approximately 100 gigawatts, placing it fourth behind China, the USA, and India [1]. Germany's installed solar power capacity was estimated to increase by a robust 14 percent, or 17.5 gigawatts, by 2024 [1].
This year, though, the growth rate was predicted to be slightly lower [1]. Carsten Körnig, commenting on the situation, noted a slight slowdown, as private homeowners are expected to install fewer new solar systems on their roofs this year [1]. However, the demand for balcony solar systems remains high, with around 800,000 systems expected by 2024 [1].
So, what's causing this slowdown in the solar market after several record years of growth? Here are a few factors at play:
- Post-Boom Adjustments: The market saw extraordinary growth in previous years and is now adjusting to its new size [2][4].
- Geopolitical and Economic Factors: The global economic landscape is marked by uncertainty and stagnation, which can squeeze investments in the solar sector [4]. Geopolitical tensions and trade uncertainties further complicate the situation [4].
- Market Dynamics and Policy Changes: The solar market's growth is significantly influenced by policy frameworks, particularly in major markets like China and the U.S. Changes in these policies have the potential to alter market dynamics, which can slow growth [3][5].
- Regional Variability: The solar market is witnessing uneven growth worldwide, with China accounting for around 55% of installations [5]. This concentration makes the market more sensitive to changes in China's economic and political conditions [5]. Other regions, including Europe, are facing challenges that could contribute to further market slowdowns [4].
Even with these challenges, the long-term outlook for the solar market remains optimistic, with forecasts suggesting a continued upward trajectory towards achieving 1 terawatt (TW) annual installations by 2030 [1][3].
Sources:
- ntv.de, dpa
- Energypedia.info
- IRSolar.org
- Solarserver.com
- Statista.com
- SolarPowerEconomics.org
- IEA.org
- The Commission has also highlighted the role of science in understanding climate-change and its impacts on renewable-energy, emphasizing the need for collaboration between the environmental-science, finance, and energy sectors to address the challenges in the solar industry.
- The slowdown in the solar market has prompted industry experts to reconsider the strategies for renewable-energy development, with some advocating for more research and investment in cutting-edge science and technology to drive growth.
- Despite the slowdown, solar-power projects are still attractive to investors, given the long-term benefits they offer in terms of environmental sustainability, energy independence, and financial returns.
- As the solar market continues to evolve, the Commission is working to create policies that encourage the growth of renewable-energy, promote energy efficiency, and foster innovation in the field of science and technology.
