Global Markets

After a decade of strong growth, the global solar market—from a production and profit standpoint—has stalled. The financial crisis in the United States sent domestic markets reeling, and reduced government tax receipts have led many states to ques­tion their often generous incentives for renewable energy. As states have been reluc­tant to expand their own incentive programs in the United States, the impact of the federal government’s aggressive stimulus plan, which included numerous market­driving policies for the solar industry, is subsiding.

While the storm clouds over the US economy appear to be lifting, Europe—the leading region for solar-installed capacity—remains in turmoil. The austerity meas­ures put into place to right the economic ship seem to be only exacerbating EU financial woes. These same austerity measures have drastically limited solar market expansion in the near term.

Compounding the solar industry’s challenges, an aging grid in developed markets, transmission project delays, and a highly charged global policy debate worsen the outlook over the coming years. These issues, together with a substantial oversupply of photovoltaics, have led many firms—particularly in the manufacturing sector—to fold.

Despite these seemingly many pitfalls, there are some global bright spots. Competition is driving down costs and increasing efficiency. Emerging markets are developing thoughtful programs and policies with more proven track records. New, well-financed market entrants, such as the United Arab Emirates and Saudi Arabia, are investing heavily in the industry.

A review of the expected trends facing the energy sector is critical to understand the future of solar markets. This chapter begins with a focus on global energy mar­kets and then reviews the major themes relative to solar power in several exemplary countries.