India may be a bright spot for global solar markets this year as it adds capacity at a record pace, becoming one of the top regions for panel producers struggling with rock-bottom prices.
India is expected to add nearly twice as much new solar as last year, outpacing once-booming Japan, according to forecasts by Bloomberg New Energy Finance. China, the world’s largest renewables market, will see solar growth dip by about a fifth after peaking in 2016, London-based BNEF predicts.
Bolstered by Prime Minister Narendra Modi’s ambitious clean-energy goals, India’s rising appetite for solar power spells good news for Chinese solar cell and module manufacturers including Trina Solar Ltd. and Hanwha Q Cells Co. It comes after the global spot market price for solar panels fell to a record low amid slowing demand elsewhere.
Japan’s solar installations for 2016 are estimated at 8.6 gigawatts to 9.2 gigawatts, lower than in 2015, according to BNEF’s forecast. The drop comes as the country scales back generous incentive tariffs.
China and Japan are now planning to adopt auctions. While India has conducted auctions since 2010 to build solar projects, Japan has promised to introduce the mechanism this year in a bid to lower the subsidies developers receive.
Japan’s new solar installs peaked in 2015 when the country added 11.5 gigawatts of capacity, according to BNEF data.
China, which has built most of its solar capacity under feed-in-tariffs, or government-set prices, is reducing these preferential tariffs and encouraging auctions to lower solar prices.