IHS Markit Predicts Annual Solar Installations to Increase by 30% in 2021

-Renewable energy installations will rebound by double-digits after the COVID-19 impasse

-China will account for 35% of global annual installations in 2021

PVTIME – Unlike other energy sources, global renewable energy power generation still managed to break records in 2020 despite of the COVID-19 pandemic. In a new report released this week, IHS Markit said that the global installed capacity of renewable energy will further surge this year. The strong development of solar and wind energy in China and other markets will push the installed capacity of renewable energy to a new record.

Last year, renewable energy proved to be the most resilient energy industry in the COVID induced recession. In sharp contrast to all other energy sources, the International Energy Agency (IEA) said in its “Renewables 2020” report that renewables used for generating electricity increased by almost 7% while the global energy demand declined by 2.2% in 2020.

In addition, unlike fossil fuels, despite the economic uncertainty, investors’ demand for renewable energy remains strong. The IEA pointed out that compared with the same period in 2019, the renewable energy capacity auctioned from January to October 2020 increased by 15%, setting a new record.

Furthermore, in 2021, renewable capacity additions are on track for a record expansion of nearly 10% due to two main factors. First, prompt government measures in key markets – the United States, India, and some European countries – have authorized developers to complete projects several months after policy or auction deadlines that originally fell at the end of 2020. Second, growth is set to continue in 2021 in some markets – such as the United States, the Middle East, and Latin America – where the pre-Covid project pipeline was robust thanks to continued cost declines and uninterrupted policy support.

According to IHS Markit, a strong rebound in renewable generation installations, a continued surge in green hydrogen growth, and a focus on recycling are among the key themes in clean technology in 2021.

IHS Markit predicts that annual global solar installed capacity will grow by over 30% in 2021 after volatile demand in 2020, triggered by the COVID-19 pandemic. China will account for 35% of all new installed capacity in 2021 but the industry as a whole is much more geographically diverse than it used to be as there are now 18 markets globally that have 1GW+ in cumulative solar installations, compared to just six a decade ago.

This strong market demand comes despite increased production costs of up to 10–15% which is driving a historic surge in module prices, especially in the first quarter. However, production costs are set to drop in the second half of 2021, lowering module prices and paving the way for record solar installations by the end of 2021.

On this subject, Edurne Zoco, executive director, clean energy technology, at IHS Markit, said, “We will see for the first time a situation in which global demand grows over 30% despite high module prices in the first half of the year, which is unprecedented in the solar photovoltaic industry.”