MIC Perspective

Importance of Emerging Solar PV Market on the Rise

With the mainstream European market declining, system installation costs have dropped considerably as result of the continued price hike of petroleum and chemicals and the falling prices of PV products. Moreover, as supply continues to exceed demand, governments around the world have been seeking for orders from domestic markets in order to stabilize the solar PV industry worldwide. Three leading emerging markets - China, Japan and the United States - play a crucial role in boosting market demand for solar PV systems.

In the aftermath of the Fukushima nuclear crisis, it is observed that costs of renewable energy have declined. The price drops have enabled the developing countries, featuring fast-growing economic performance, relatively low electricity prices, and absence of nuclear power, to begin adopting renewable energy in face of soaring energy demand. These countries also become the growth drivers for renewable energy development. However, despite of the provision of preferential policies, the demand of developing countries for solar PV installations can be highly uncertain as the developing countries tend to hold a more discreet attitude toward budgetary process and the governments of developing countries tend to make decision based on the rule of human rights.

Discrepancies between Emerging Markets and European Markets

Compared with the European subscribers who focus more on environmental protection and abide by the rule of law, under the condition where system providers in the emerging markets always seek alternative approaches to government policies. Governments of the emerging markets thus prefer to launch government-led projects and carefully monitor market demand. As a result, large-scale power station construction projects have always constituted a large share of the total PV installations in the emerging markets since the system installation costs tend to be relatively low there. The emerging market governments focus mainly on boosting industrial development and local employment opportunities. With the existence of numerous local manufacturers in the emerging markets, international branded vendors are expected to face hardship when competing head-to-head with emerging market vendors benefited from cost competitiveness and the advantage of geographical proximity.

Appendix

Glossary of Terms

List of Companies