Worldwide Solar Power Installations to Overtake Wind

This article was published by the Center for American Progress Action.

In 2013, more global solar photovoltaic capacity will be installed than wind power capacity — the first year that’s ever happened, according to Bloomberg New Energy Finance (BNEF).

There are several distinct forms of solar power — such as thermal solar, which is used to heat water, or concentrated solar, which augments thermal systems with huge mirror arrays to capture more sunlight. But solar PV arrays are the traditional electricity-generating panels most people think of when they think of solar power. BNEF forecast that installations of new solar PV capacity will hit 36.7 gigawatts in 2013, an increase of around 20 percent over 2012. Unfortunately, the fact that this will pull ahead of wind power’s predicted installations of 35.5 gigawatts is largely due to a drop in the market of almost 25 percent from 2012.

Taken together, China and the United States make up almost two-thirds of the global wind power market, and both saw recent policy disruptions that contributed heavily to wind’s stall. China, which obviously relies much more heavily on state guidance of the economy, recently tightened its standards for wind turbines, it hasn’t kept up with infrastructure investment, and there’s been grumbling amongst the country’s developers that its feed-in tariff for offshore wind is inadequate.

In the U.S., the production tax credit for wind energy has gone through several rounds of last minute extensions over the last few years. That policy uncertainty led to a kind of boom-and-bust cycle: wind installations spiked in 2012 as firms rushed to get construction finished in time to qualify for the credit before its expected expiration at the end of that year. That actually drove the U.S. all the way to the top of wind’s national markets that year — but it also led to an inevitable fall-off for installations in 2013, even though the credit was ultimately extended for another year.

The preferable solution would be a long-term or permanent extension of the tax credit. But the new extension is at least more lenient. Projects now merely have to start construction by the end of 2013 to qualify, giving developers more time. So forecasters expect a ramp back up for wind installations in 2014.

Meanwhile, America’s solar installations have been chugging their way to new heights. 2013′s second quarter saw 832 megawatts installed, making it the second-best quarter on record, and installation prices are dropping across the country. In Asia, demand for solar is surging as the cost of modules and installation stabilizes, and analysts anticipate major solar markets across the globe will become sustainably competitive without any form of government incentive by 2014.

“The dramatic cost reductions in photovoltaics, combined with new incentive regimes in Japan and China, are making possible further, strong growth in volumes,” said Jenny Chase, BNEF’s head of solar analysis.

So despite the ups and downs and market noise created by shifting government incentives, the underlying story here is a steady upward climb in both the solar and wind markets. Ultimately, BNEF projects that onshore and offshore wind will combine to provide 17 percent of the world’s total power generation in 2030, up from five percent today. Solar PV they see moving from 2 percent of that generation today to 16 percent by 2030.