Renewables 2019 - IEA Analysis and Market Report

Solar PV set to more than double in capacity in the next five years.

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February 20, 2020


Distributed solar PV systems in homes, commercial buildings and industry are set to take off, bringing significant changes in power systems. A rapid rise in the ability of consumers to generate their own electricity presents new opportunities and challenges for electricity providers and policy makers around the world.

Source: IEA Renewables 2019 Report

  • China is forecast to account for almost half of global distributed PV growth
  • Heat generated from renewable energy is set to expand by one-fifth between 2019 and 2024
  • Renewable electricity used for heat is forecast to rise by more than 40%

What is Solar PV?

Solar Photovoltaic (PV) is a technology that converts sunlight into direct current electricity by using semiconductors. When the sun hits the semiconductor within the PV cell, electrons are freed and form an electric current. To boost the power output of PV cells, they are connected together in chains to form larger units known as modules or panels.

What is Distributed PV?

Distributed solar photovoltaic (PV) systems have the potential to supply electricity during grid outages resulting from extreme weather or other emergency situations. As such, distributed PV can significantly increase the resiliency of the electricity system.

The Projected Growth of Solar PV

Renewable power capacity is set to expand by 50% between 2019 and 2024, led by solar PV. This increase of 1200 GW is equivalent to the total installed power capacity of the United States today. Solar PV alone accounts for almost 60% of the expected growth.

In particular, the growth of distributed PV capacity is forecast to increase 320 GW in the main case, almost half of total PV growth and a similar expansion to onshore wind. The total capacity of distributed PV more than doubles, surpassing 500 GW in the main forecast (and 600 GW in the accelerated case), almost half of total solar PV growth and a similar expansion to onshore wind.

Solar PV, including utility-scale and distributed applications, accounts for almost 60% of all renewable capacity expansion over the forecast period, followed by wind, hydropower and bioenergy.

Solar PV Global Infrastructure

In 2019, global solar PV additions are expected to rebound, mainly in the European Union and Vietnam, after remaining flat in 2018. China accounts for over 40% of global PV growth, followed by the European Union and the United States, which demonstrate similar capacity expansion in the next six years.

Distributed PV Forecast

Globally, distributed solar PV capacity is forecast to increase by over 250% during the forecast period, reaching 530 GW by 2024 in the main case. Commercial and industrial systems remain the largest growth segment because they are usually more inexpensive and have a relatively stable load profile during the day that can enable larger savings on electricity bills, depending on the policy scheme in place.

Distributed PV Renumeration Schemes

There are five different categories of renumeration schemes listed in the IEA Report. These are:

1) buy-all, sell-all;

2) net metering;

3) real-time self-consumption at the wholesale price;

4) real-time self-consumption at a value-based price (usually between the wholesale and retail price), whereby utilities or regulators estimate the value of PV generation based on avoided generation capacity expansions, fuel expenditures and any additional costs, and on benefits to the system or society (grid integration costs, CO2 reduction value, capacity credits, etc.);

5) real-time self-consumption at zero remuneration.

The use of these schemes varies by segment. The main driver for commercial growth is self-consumption in real time, largely because of the good match between electricity demand and peak PV production at midday.

Residential PV Forecast

Residential solar PV capacity expands from 58 GW in 2018 to 143 GW in 2024, and annual capacity additions are expected to more than triple to over 20 GW by 2024. China leads the way FITs under the buy-all, sell all model, surpassing the European Union, the United States and Japan. The United States is the second largest growth market, followed by Australia and Japan.

India and other developing countries growth is limited due to minimal policy incentives, the absence of regulations (or their inadequate implementation), and low, cross-subsidised residential electricity tariffs, making the economics unattractive.

Overall Outlook

Overall Solar PV alone accounts for almost 60% of the expected growth in renewable power capacity. With continuous development of new technologies and adoption by countries around the world, the forecast is positive for all players in the space.

Source: IEA (2019), "Renewables 2019", IEA, Paris

Further Reading
Research Project Between Solar Adventure Ltd. and the University of British Columbia Receives Two-Year Grant
Solar Adventure Ltd, a startup in incubation at Empowered Startups, has initiated a solar research project with the University of British Columbia’s (UBC) School of Engineering located on the Okanagan campus.
February 29, 2020
Vietnam will face severe power shortages from 2021: ministry
Rapid growth of rooftop solar market, sign of diversification.
February 12, 2020