China, India Emerge as Most Promising High-Growth Markets for Solar

Japan, U.K., France, and South Korea also offer attractive landscape and large addressable markets, according to Lux Research’s analysis of policy and market drivers

By: Matt Feinstein, Lux Research

Global policy changes and the crystalline silicon module price crash have brought the solar industry to a pivotal point from which it must transform and thrive in a cost-conscious environment, targeting high-growth markets such as China and India, according to Boston-based research firm, Lux Research.

While some historically strong demand markets will continue to pay dividends, the real winners going forward will need to make a few well-informed bets. Successful players will anchor business in key developed regions like the U.S., Europe, Japan, and China, and place informed bets in markets like South/Central America, the Middle East, and Africa, through new offices or partnerships.

Lux Research analyzed the risk vs. reward, based on policy and market factors, for both distributed and utility-scale solar in countries around the world. Among their findings:

Europe shines for distributed generation. Established markets remain fruitful for distributed generation despite downturns in demand and reduced feed-in tariffs. Markets such as Germany and Italy have demonstrated a strong preference for rooftop systems and have strong existing channels to market.
Utility-scale generation soars in emerging markets. High-growth markets come with high risks as well, but emerging economies of India, China, South Africa, and Saudi Arabia are set to become solar powers. Competition is booming in the last three in particular, and each will exceed installation targets.
Fortune favors the bold. In solar, firms that take calculated risks and expand quickly into foreign markets will boost success, as First Solar and many Chinese module manufacturers have shown. As the Chinese industry consolidates, opportunities exist for other global players.

Though some markets stand above the others in each region and application segment, the key lesson from experiences in Spain, Germany, and Italy is that too high a stake in few key markets can leave business stakeholders scrambling as policy changes. Those looking to win in distributed generation must broaden their technology scope, and those in utility-scale development must broaden their geographic scope.

About Lux Research

Lux Research provides strategic advice and on-going intelligence for emerging technologies. Leaders in business, finance and government rely on us to help them make informed strategic decisions. Through our unique research approach focused on primary research and our extensive global network, we deliver insight, connections and competitive advantage to our clients. Visit www.luxresearchinc.com for more information.

SEMI, The Grid - February 2013