The European photovoltaic (PV) solar market is undergoing a transition as the era of generous subsidies comes to an end. System prices continue to plummet as Chinese manufactures exert pricing pressure on their European counterparts, forcing inefficient companies to exit the market as evidenced by a number of top players being forced to close their factory gates at the end of 2011- beginning of 2012. In the concentrated solar power (CSP) market, technology developers continue to innovate and focus on reducing the cost of energy.
New analysis from Frost & Sullivan (energy.frost.com), European Solar Power Markets, estimates that overall revenues in 2015 will shrink to €6.57 billion, with the European CSP market set to expand from €2,114 million to €5,227 million over 2010-2015.
"Overcapacity and plunging solar panel raw material and component prices are driving solar module costs and prices down, thus making the investment more attractive to buyers," noted recent research from Frost & Sullivan. "In order to counter the effect of diminishing incentives and stimulate demand, manufacturers along the value chain are expected to continue lowering solar module prices even further."
Maturing PV solar technology and declining energy costs are being accompanied by scaled-back subsidies. Despite the diminishing tariffs, the industry is attracting several investors that want to benefit by including solar technology in their portfolio.
At the same time, CSP technology is developing rapidly. Based on its potential to produce low-cost solar electricity on a larger scale, it has been able to attract investors.
However, significant cuts in government support for solar power in key markets and indications of further cuts have created considerable uncertainty in the market. As a result, investors are hesitant to proceed with their planned solar projects.
"To moderate the unsustainable growth of the PV solar market and citing a sharp drop in solar module prices, several European countries are scaling back the feed in tariffs, while placing limits on annual capacity additions," stated Frost & Sullivan research. "Continued government support will be vital if the nascent CSP technology sector is to develop further."
As profit margins become thinner, it is imperative for PV solar module manufacturers to produce more efficient modules. The overall market will receive a further fillip if energy from CSP, which can be stored or combined with gas, could become competitive in the next decade through technological innovation and economies of scale.
If you are interested in more information on this study, please send an email with your contact details to Chiara Carella, Corporate Communications, at chiara.carella[.]frost.com.
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European Solar Power Markets / M75B-14