Bridge India

Asia takes over from Europe to lead the solar market

Asia has registered unprecedented growth in 2013. China and Japan have become the largest solar markets in the world. With an over 200% increase in new solar installation in 2013, both China and Japan more than doubled their cumulative capacities. European countries such as Germany and Italy will likely lose their leading positions. For an overview, download our latest India Solar Handbook [download here].

  • Asia has toppled Europe as the leading solar market with over 56% of the total solar capacity added in 2013
  • China (11.3 GW) has added more capacities than the entire European market in 2013 (10.8 GW)
  • India has only grown by around 1 GW but remains the country with the highest long term potential for solar

Europe has dominated the solar energy for over a decade. Germany, Italy or Greece can already meet over 5% of their annual electricity demand from solar. Lucrative feed in tariffs (FiTs) have attracted much investment. However, most European countries continue to reduce FiTs and growth slows. The markets seem to have peaked for now. Asian countries, on the other hand, drive growth in the industry.

In total, 36.9 GW of solar capacity has been added in 2013. China was the biggest solar market with record new installations of 11.3 GW. It contributed 31% of the total capacity added in 2013 – more than all of Europe put together (with 10.8 GW or 29%). China surpassed Italy to become the second largest market in cumulative terms with 18.3 GW of installed capacity by 2013. Japan has been the second largest market after China and installed 6.9 GW in 2013.[1] Other Asian countries such as India, Korea and Thailand are growing.

Handbook- blog #2- graph 1

Figure 1: PV Markets growth in 2013[2]

Handbook- blog #2- graph 2

Figure 2: Share of major PV markets for new solar installations in 2013[3]

The energy hungry Chinese solar market has been driven by a nation-wide FiT, subsidies at the provincial level and large-scale pilot projects under the “Golden Sun” program. The Chinese government has announced ambitious plans of adding 14 GW of solar installations in 2014.[4] Although, there are uncertainties surrounding the 8 GW rooftop solar projects due to implementation challenges, China will certainly achieve or possibly surpass their 6 GW utility scale project target.

After the Fukushima nuclear disaster in 2011, Japan has shifted focus towards the development of solar projects. To that end, the country has introduced one of the highest FiT in the world. As a result, the market has seen a surge. IHS expects that Japan will add 9 GW of solar installations in 2014.[5] Going by the forecast, Japan will likely become third largest market in cumulative terms by the end of 2014.

And waiting in the background are still larger market opportunities, especially in India, which has the largest potential for solar globally. In 2013 it only added 1 GW to come to a cumulative total of 2.5 GW. Growth will be comparatively slow as long as it is subsidy dependent. However, as solar reaches parity with diesel costs and grid tariffs, the market will experience rapid and sustained growth.

European markets, on the other hand, have registered significant slowdown in terms of solar installations in 2013. Additions were only 10.8 GW, a reduction of over 50% as compared to the 2011 level. The German government has set a targeted corridor of installations of 2.5 GW to 3.5 GW per year to reduce the subsidy burden. In future, the government plans to introduce self-consumption fees, FiT cuts and limits on new capacity expansion. This puts a firm lid on growth. The market in Italy came to an abrupt slowdown in 2013, when FiTs were discontinued. Spain, also, has retracted its support for solar by way of FiTs in 2012. Additionally, the European Union, in a move to counter cheap imports from China, has fixed the minimum net import price for modules at EUR 0.56/ Watt in 2013. This increased the cost for solar.

[1] IEA PVPS, Snapshot of Global PV (1992-2013;

[2] IEA PVPS, Snapshot of Global PV (1992-2013), IEA PVPS, Snapshot of Global PV (1992-2013);

[3] IEA PVPS, Snapshot of Global PV (1992-2013);

Note : The contribution from Rest of World is very small to feature in the graph

[4] National Energy Board, China;

[5] IHS pressroom;

Mudit Jain is a Consultant at BRIDGE TO INDIA.