Luckily I was sitting down when a new forecast from market research firm, iSuppli Corp dropped into my inbox. Despite module and inverter shortages and lack of well trained installers as well as significantly higher prices than seen in Germany, the UK solar market is claimed to be the fastest growing in the world right now. According to the market research firm solar system installations will reach 96MW in 2010, up 1,500% from barely a year ago and before the feed-in tariff (FiT) was introduced in April this year. Then in 2009 only 6MW had been installed.
iSuppli said that after the initial starting phase, spurred by the FiT introduction the UK market should settle down in 2011 and onwards. However, growth is expected to continue with installs reaching 143MW in 2011 and 214MW in 2012. By 2014 installations are forecasted to reach 500MW per annum.
Not only is the UK FiT relatively attractive, though could be more so if prices were comparative with Germany and the U.S., however iSuppli believes the expected impact of the FiT cuts in Germany will free supply and make the UK market more attractive to suppliers.
“With leading solar country Germany cutting its FITs, the focus of the PV world is shifting to places with more favorable incentives—making the United Kingdom a solar hotspot this year,” commented Dr. Henning Wicht, Senior Director and Principal analyst for iSuppli Corp.
Read into this that the UK market should become more competitive on pricing and installation costs as more companies seek to sell product after the market softens in Germany.
This looks like good news for the UK consumer in the short-term. However, concern could mount if as iSuppli projects, installations top 500MW per annum in only the next four years. As seen in Spain, Germany and Italy overheating markets get punished with faster FiT regressions than originally planned, causing boom and bust cycles rather than long-term market stability.
With UK PV installations forecasted to increase in the 50% range for each year through 2014, such growth levels could bring forward the risk of reactionary cuts in the FiT.