5 Trends Shaping the

Solar Technology Industry

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

 2

#1. The scalability of Average solar panel manufacturing cost ($/W)

solar is driving down 1.60

1.40
manufacturing costs 1.20

1.00

0.80

From 2021, over 500 million solar 0.60

panels will be manufactured 0.40

globally every year, allowing
continued cost reduction via 0.20

economies of scale. 0.00

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: IHS Markit © 2018 IHS Markit

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

As cost continue to fall, the scale of solar deployment will accelerate with
installations occurring at all points of the grid
Off-Grid
1%
Residential roof-
top
12%

630 GW of
Solar panels can be
photovoltaic (PV)
installed in applications
ranging from small off- systems will be
grid systems to GW-scale Ground-mount installed from Commercial
55% roof-top
power plants 2018 to 2022
32%

Source: IHS Markit © 2018 IHS Markit

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

 4

#2. Solar is increasingly competitive with

conventional sources of power generation

In 2016 and 2017, more solar was

installed globally than any other
type of power generation.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Even in Germany (where weather conditions aren’t perfect), solar competes with
thermal power generators
Price paid for electricity generated by large-scale solar in Germany (€/MWh)
300

Feed-in tariff prices

250 Winning tender bids

Note: In 2014, Germany switched from offering

a fixed feed-in tariff incentive scheme, to a
200 competitive tender system

150

100

Typical global thermal generation costs

50 (e.g. gas, coal)

0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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 6

#3. Solar will play a key part in the

decentralization and digitalization of the power
system

Distributed generation, such as solar, now

plays a very significant part in the overall power
mix. Recent years have given rise to electricity
‘prosumers’ – customers who now generate
and consume their own electricity using solar
panels.
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
The “Energy Transition” – creating an intelligent, efficient, clean, customer-centric
electricity network

Decentralisation Digitalization
IHS Markit predicts that by 2020, over 5% of power in A range of innovative new digital technologies are being
Germany, Italy and the United Kingdom will be generated deployed in order to improve the efficiency, usability and
by PV systems on the customer’s side of the meter reliability of a new distributed power system.

“Internet of
“Renewables” “EVs” “Microgrids” Energy”

“Industry
“Thermal
4.0”
Power Generation”
“Energy “Solar” “IoT”
Storage”
Centralised Decentralised “The Electricity Network”
Power “Grid” Power “Grid” “Vehicle-
“Distributed to-grid”
“Cloud”
“Conventional Generation”
“Centralised
Power Generation” “Wind”
Infrastructure”
“DERMs”
“Behind-the-Meter” “VPP”
“Blockchain”

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#4. Investments in Global installed solar PV capacity

solar will continue 1200

to increase, with 1000

growth driven by 800 $600B

Asia investment

(GW)
600

400

200

Total solar installations will

0
increase by 154% from 2017 to 2017 2022
2022, spurring additional Middle East South and Central America
Europe Africa
investment of $600 billion. North America Asia Pacific
Source: IHS Markit © 2018 IHS Markit
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
China will continue to dominate global solar manufacturing, and will also remain a
major end market - Asia accounts for 92% of supply and 60% of demand
100% 100% 100% 100% 100%

90% 90% 90% 90%

= share
90%
of global demand
(2018 – 2022)
80% 80% 80% 80% 80%
= share of global solar panel
70% 70% 70% 70% 70%
manufacturing capacity (2018)
60% 60% 60% 60% 60%

50% 50% 50% 50% 50%

40% 40% 40% 40% 40%

30% 30% 30% 30% 30%

20% 20% 20% 20% 20%

10% 10% 10% 10% 10%

0% 0% 0% 0% 0%
Series 1 Series 2 Series 1 Series 2 Series 1 Series 2 Series 1 Series 2 Series 1 Series 2

China India Rest of Asia USA Europe

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 10

#5. Global corporations will play a growing

role in the solar industry

Attracted by the growing opportunity

of solar power and attractive returns,
as well as pressure to increase the
sustainability of their businesses,
major global corporations are
investing into the solar industry.
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Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
Global corporations continue to step in to claim their stake in the solar industry

Select investments in solar PV by major global corporations

Acquired US solar panel manufacturer, Sunpower,

Total $$$$$$$$$$$$$$$$$$$$ for $1.3 billion in 2011.

Acquired US solar installer,

Tesla $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ Solarcity, for $2.6 billion in 2016.

Acquired UK solar developer,

BP $$$$ Lightsource, for $200 million in 2017.

Acquired US solar developer, Silicon

Shell $$$$$ Ranch for $217 million in 2018

Invested $300 million in the China Clean

Apple $$$$$$ Energy Fund in 2018.

$1B $2B $3B

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 13

Learn More

Edurne Zoco, Director – Energy Technology technology.ihsmarkit.com

E edurne.zoco@ihsmarkit.com Twitter - @IHSMarkitTech

Sam Wilkinson, Associate Director – Energy Technology

E sam.wilkinson@ihsmarkit.com

IHS Markit Customer Care

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