'Big changes' ahead for solar industry as European installations fall

According to the European Photovoltaic Industry Association (EPIA), the total capacity of new solar PV connected to the grid in Europe in 2012 fell to 17.2GW, down from 22.4GW in 2011. Europe accounted for around 55% of the world's new PV installations in 2012, down from more than 70% in 2011.

Reporting on its findings (60-page / 5.7MB PDF), EPIA said that it was "almost certain" that in 2013, the majority of new PV capacity installed in 2013 would be located outside of Europe for the first time.

"The results of 2012 signal a turning point that will have profound implications in the coming years," said Winfried Hoffman, EPIA President. "The global PV market is shifting from one driven mostly by Europe to one that also depends on countries around the world with varying degrees of solar potential and the political will to exploit it."

"But some things will not change. Even in challenging times, the prospects going forward for solar PV – a clean, safe and infinitely renewable power source - remain solid, especially the medium- to longer-term. The main questions are how and where continued PV growth will occur, and how committed policymakers are to making it happen," he said.

According to the survey, the total amount of new solar PV installed globally in 2012 was slightly higher than the "record-setting" 31GW installed in 2011. These results came "even during a period of economic crisis and industry consolidation", EPIA said. In addition, solar PV remained the third most important renewable energy source by globally installed capacity after hydro and wind power.

PV was the number one new source of electricity generation installed in Europe in 2012, for the second year running, the EPIA said. Germany was the top global market in 2012 with 7.6GW of newly-connected systems; followed by China, Italy, the USA and Japan. New installations in Spain fell due to "market constraints", the EPIA said, while the results from the UK and France continued to reveal "untapped potential".

In its report, the EPIA analysed the likely uptake of solar PV technology over the next five years based on data collected from the PV industry, electric utilities, national associations and energy agencies. It included two sets of figures: one based on a "pessimistic" business-as-usual scenario and one based on a "policy-driven" scenario assuming the continuation, adjustment or introduction of "adequate support mechanisms" and political will. Under the business-as-usual scenario, the report predicted a global annual market of 48GW by 2017 while under the policy-driven scenario it said that new installations could reach 84GW annually.

The UK installed 925MW of solar PV capacity in 2012 according to the report; a figure that the EPIA described as "surprisingly moderate compared to expectations". However, the long-term prospects for the UK market "remain quite positive even if the speed at which the market develops is not so impressive", it said.

However, the EPIA report did not mention the UK's new feed-in tariff (FiT) degression mechanism, which took effect in November 2012. Current UK policy permits automatic reductions to the incentives paid to businesses that install solar PV technology on buildings on a quarterly basis, in line with uptake and the falling costs of the technology. The policy was introduced after emergency cuts to the tariffs were overturned by the High Court in December 2011.