Deutsche Bank hails second solar ‘gold rush’: UK in 6th place.

PV Tech: “In a new detailed report by Deutsche Bank’s US-based solar industry analysts, the PV industry is said to be heading into its “second gold rush” with a base demand of 46GW in 2014, topped by an expected 56GW of demand in 2015.”
“Deutsche Bank is echoing recent bullish analysis of the PV sector by market research firm, NPD Solarbuzz, which is projecting PV installations to reach 49GW in 2014.
However, Deutsche Bank noted in the report that there was potential for demand to be higher than forecasted in 2014 due to the key markets of China, Japan and the US exceeding projected installation levels as markets build considerable momentum.
Deutsche Bank’s base case demand estimates for China go from around 8GW in 2013 to 12GW in 2014, while the Japanese market is expected to increase from around 7GW in 2013 to around 8GW in 2014.
The US, the third major market, is expected to see demand increase from 6GW in 2013 to around 8GW in 2014.
Despite the European market in decline, Deutsche Bank projects that Europe would account for between 7-8GW of demand in 2014.
Emerging markets are also expected to make a considerable contribution, ranging from 12GW to 17GW of demand, notably from India, South Africa, South America, South East Asia and Australia, which are all expected to surpass 1GW in 2014.
However, despite Deutsche Bank’s bullish analysis it may be underestimating demand dynamics in some key markets such as the UK. According to the bank’s analysis, the UK market demand is expected to reach 1.1GW in 2013 and only increase to 1.3GW in 2014.
“The UK installed over 1.4GW during 2013, with deployment in Q4’13 much higher than previously expected,” noted Finlay Colville, vice president of NPD Solarbuzz to PV Tech. “Currently, the economics under 1.4 ROCs/MWh are driving a strong mid-year pull from the ground-mount segment during 2014 – something that was in absence during 2013.
“The UK will comfortably exceed the 2GW level during 2014, with upside potential if changes in legislation to enable the mid-size segment can be accelerated to impact deployment levels over the next 12 months. The residential segment is also set for a very strong Q1’14, with contributions from Northern Ireland also having an impact before changes to residential installations take effect from the start of April.”
….Deutsche Bank also noted that PV was currently competitive without subsidies in at least 19 markets globally and expected more markets to reach grid parity in 2014 as balance-of-system prices continued to decline, despite cost-per-watt reductions slowing”
Solar power portal: “Large-scale solar PV installations in the UK grew by an incredible 600% during 2013, driving the UK to a record 1.45GW of new solar PV capacity added.
Ground-mounted installations accounted for over 90% of new large-scale solar PV added in the UK in 2013.
The UK was ranked in sixth place globally for large-scale solar PV, and is one of just six countries that had, or approached, a GW-level large-scale solar market during 2013.

Large-scale Solar PV by country in 2013
Figure one: The UK was ranked in sixth place for large-scale solar PV demand in 2013, and was one of only five countries to be ranked in the top 10 for both small and large-scale solar PV demand for 2013
The ranking for large-scale solar PV was the same as the small-scale segment. The UK was one of only five countries to feature in the top-10 rankings for both small-scale and large-scale solar PV deployment in 2013; a fact that should be welcome news to the Department of Energy and Climate Change (DECC) and UK trade associations in their quest to diversify the UK PV landscape.
The fact that the large-scale segment grew by 600% in 2013 is largely a consequence of 2012 being low and 2013 being high. It also hides the outstanding dilemma for the UK solar PV industry that is the large-scale rooftop segment (better broken out when analysing the UK PV marketplace).At the end of 2013, cumulative PV in the UK had exceeded the 3GW level, with the 4GW marker set to be reached by 31 March 2014 after what will be a record-breaking quarter for the UK PV industry.
Examining the phasing of the large-scale UK projects within the new NPD Solarbuzz Global Deal Tracker report (released at the end of January 2014), we have upgraded our forecasts for 2014 demand in the UK. Remember that this refers to calendar year 2014 (January to December) and not the fiscal years used by the government (running through to the end of March each year).
Demand in the first quarter of 2014 (Q1’14:January to March) is set to be record breaking (so long as flooding alerts are avoided in March and there are no heavy snow falls). There are three factors driving the record-breaking quarter of Q1’14:
– The ground-mount Renewable Obligation Certificate reset on 1 April 2014, impacting on large-scale ground-mount activity being completed by the end of March.
– The small-scale FiT degressions on 1 April, driving a spike in residential installations in mainland UK.
– Adjustments to the capacity allowances for the Northern Ireland residential segment on 1 April.
….There has been no let-up in the ground-scale aspirations of leading project developers in the UK, providing conclusive proof of the viability of solar PV under 1.4 ROCs/MWh.
….However, as shown in Figure 2, the UK ground-mount pipeline is dominated by projects awaiting planning permission (either pre-planning/screening or applied/awaiting-approval), with these two segments adding up to almost 3GW.
UK Larg-scale Ground-mount Solar PV pipeline
Figure two: Including projects terminated/delayed, the UK’s large-scale ground-mount pipeline has reached 5GW, comprised of over 550 projects in excess of 250kW.”
Bloomberg: “Britain may build more big plants — 2 megawatts or larger — than any European country, adding as much as 2,000 megawatts of capacity this year, according to PricewaterhouseCoopers LLP. Those panels would occupy about 16 square miles, enough to cover most of central London.
While much of the continent has scaled back solar aid to favor economic growth over green policies, the U.K. pledged subsidies through 2020 with no limit on the size of projects. Investors raised at least 750 million pounds ($1.2 billion) last year for megawatt-scale projects, according to data compiled by Bloomberg.
….Britain is attracting investors and developers from across the region including Portugal’s Martifer SGPS SA and the Dutch Infrastructure Fund BV. The country’s first solar funds listed last year: Foresight Group LLP raised 150 million pounds in October for one, while Bluefield Partners LLP got 130 million pounds in July for another. Both attracted retail and institutional investors, which increasingly are interested in the industry.
“We expect the U.K. to be a multibillion-pound solar market over the next few years,” said James Armstrong, a partner at Bluefield, which seeks as much as 400 million pounds within two to three years.
Britain, one of the gloomiest countries in the region, could have as much as 20 gigawatts of solar capacity by 2020 from almost 3 gigawatts now, Energy Minister Greg Barker has said. That would beat Italy’s current 16.5 gigawatts and Spain’s 4.7 gigawatts, while trailing Europe’s biggest solar nation, Germany, with 35.4 gigawatts.
….The promise of long-term subsidies has been sweetened by the price of panels, which has dropped by half since 2011. Solar Century Holdings Ltd. Chief Executive Officer Frans van den Heuvel expects as much as 1,400 megawatts of projects over 1 megawatt to be completed next year, more than anywhere in Europe, he said in an interview.
PwC’s Guttmann sees Britain adding 1,500 to 2,000 megawatts of projects over 2 megawatts in 2014. He based his estimate on the 1,500 megawatts already approved and another 1,500 megawatts awaiting approval.
….Meanwhile, Europe is in decline. Spain stopped subsidies to new solar parks in 2012, and Italy ended them in July. Germany has cut tariffs and limited the size of projects amid a broader shift in energy policy. Fast solar growth in Greece, Romania and Bulgaria in the past year has stalled due to subsidy cuts and policy changes.
….U.K. solar parks get aid through the Renewables Obligation Certificate system, which requires power suppliers to source an increasing portion of their electricity from clean energy.
The program, available until 2017, grants tradable green certificates for 20 years. Support for new solar projects, now 1.6 certificates for each megawatt-hour, drops each April, prompting a rush to connect. From next year, developers can opt for an alternative system involving so-called contracts for difference at rates announced on Dec. 4.
While solar parks will earn 5 pounds less per megawatt-hour than expected through 2016, the rates show good support for the industry until 2020, the STA lobby said.
Lightsource Renewable Energy Ltd., Britain’s largest developer, has invested more than 600 million pounds in more than 300 megawatts and sees the market continuing to grow after subsidies are reduced.”