National Markets

Huge potential outside of Europe

Solar park in Perovo (Ukraine) with a rated output of 100 MW. The additional 800 green jobs created during the seven-month construction period allowed the economy to be stimulated locally
Photo: Activ Solar GmbH

The market’s most important driving forces are the falling system costs of photovoltaics and the increasing price of electricity generated using conventional technologies. While solar module prices could stabilize in 2013 (cf. fig. 1) system costs are more likely to change. EPIA estimates that the price of PV systems belonging to the utility-scale sector (2.5 MW and above) will fall by a quarter within the next ten years, from 1.22 euros per watt (W) in 2012 to 0.92 euros per W in 2022.

In 2012, the market for large solar farms with outputs over 1 MW developed rapidly worldwide, becoming the fastest growing sector within the solar market. While the European and Japanese markets are dominated by smaller roof-mounted installations, expansion in Asia, North America and other regions has almost exclusively stemmed from installations within the utility-scale sector.

According to figures from EPIA, 31.1 GW of new installations were added in 2012, with 17.2 GW in Europe. Europe’s share is declining: In 2011, 22.4 GW were installed on the continent (30.4 GW globally). Analysts at NPD Solarbuzz predict that emerging markets, such as China, North America and India, will also grow further in 2013. In 2012, they were responsible for around a third of new PV capacity installed worldwide.


In terms of global cumulative installed capacity, Europe still leads the way with 17.2 GW connected to the grid in 2012. This represents 55 percent of the world’s annual PV capacity. The European photovoltaics market is dominated by four countries: Italy, Germany, France and United Kingdom. Together they accounted for 75 percent of the European market in 2012. The most important single market was Germany, which installed 7.6 GW of new capacity (7.5 GW in 2011).

A new set of rules governing feed-in tariffs have applied in Germany since April 1, 2012, lowering remuneration to 13.5 euro cents per kWh for ground-mounted solar installations with outputs of between 1 and 10 MW. Additionally, the feed-in tariff for new installations is falling further each month in line with the current rate at which new capacity is being installed, and plants with capacities greater than 10 MW no longer receive any remuneration whatsoever, with additional restrictions applying in the case of neighboring power plants, for example. It is therefore expected that in the future the construction of new solar power plants with MW-scale outputs in Germany shall exclusively follow the cost-effective investment model of directly marketing solar power currently in use in the USA.

It has been estimated that the German market shall reach a capacity of between 4 and 5 GW by the end of 2013. It remains uncertain as to what extent power plants in the MW range will contribute to the newly installed capacities over the years to come. In 2012, systems greater than 2.5 MW contributed around 40 percent of the annual installed capacity in Germany (cf. fig. 2).

However, since PV systems with outputs of 10 MW and more are no longer supported by a feed-in tariff, this amount is likely to fall.

4 MW plant in Possidente (Italy). A general contractor was responsible for implementing the solar plant during the entire process chain.
Photo: SiG Solar GmbH

In Italy, the fact that the money made available by the fifth Conto Energia was used up prematurely by the start of 2012 meant that the amount of new photovoltaic capacity installed in the country fell from 9.5 GW in 2011 to 3.4 GW in 2012. Here, political debates have prompted a drastic reduction in feed-in tariffs and in the middle of 2012, the government in Rome decided not to support any further ground-mounted solar parks.

In addition, all solar generators with outputs greater than 12 kW must be entered into a plant registry in the future. No restrictions are to be made on the installation of smaller systems. However, feed-in tariffs are being cut significantly: 3 kW installations will receive 23.7 euro cents, roof-mounted installations with an output of 200 kW 19.9 euro cents per kWh, and ground-mounted installations 16.1 euro cents per kWh. Experts anticipate that expansion in Italy will almost exclusively ensue from roof-mounted installations, though on roofs with sufficient surface areas, these are able to achieve outputs of several MW. The amount of new capacity installed is likely to amount to between 1.5 and 2 GW in 2013 and the years to follow.

The Sabaranis solar park in the village of Saint Amadou (the department of Ariège, France) has a rated output of 8.5 MWp. 16 inverters feed solar power into the public grid via the plant’s own medium-voltage transformers.
Photo: Areva GmbH

According to figures from EPIA, France connected around 1.8 GW of solar power to the grid in 2012, more than 2011 with 1.1 GW. A feed-in tariff only exists for installations with a rated capacity of up to 100 kW. Calls for tenders are used to fund large projects. The government in Paris plans to limit the annual installation of new photovoltaic systems to 500 MW. Interestingly however, France had to import solar and wind power from Germany at the start of 2012 and 2013 due to the cold winter. French homes are predominately heated using electricity, meaning that increasing electricity costs and a lack of capacity within the country made these imports necessary.

The performance of the year in 2012 came from Great Britain, which installed 925 MW of new capacity (2011: 813 MW).

Thanks to the highest levels of irradiance throughout Greec, nine solar parks on the island of Crete generate around 1.2 MW of clean electricity each year.
Photo: Conergy

912 MW was newly constructed in Greece, owing to the fact that the country’s sunny climate allows photovoltaics to act as an alternative to the increasing price of power generated from coal. Meanwhile, Bulgaria, another country with a high level of insolation, installed 767 MW. Despite its comparatively small size, Belgium installed 599 MW of capacity, mainly in the form of “small” roof-mounted systems.

Spain: solar park in Viana. With a capacity of around 9 MW, the park is able to supply more than 2,500 households with electricity.
Photo: Aleo Solar Deutschland

Spain has completely stopped feed-in tariffs for solar power produced by new installations, meaning large-scale solar power plants are now only possible via the open market. High levels of insolation and reliable solar radiation conditions, combined with a continuous fall in the price of PV components, have opened up this market segment, breathing new life into the Spanish solar market (2012: 200 MW). For example, a solar farm with an output of 250 MW, which is to be installed in the province of Cáceres by 2015, will be solely refinanced by the commercial sale of solar power. Work at the site, which is in a region with very high levels of insolation, is due to begin in 2013. The solar farm will cover an area of 750 hectares and is expected to cost around 250 million euros. It will achieve an annual yield in the region of 400 million kWh.

Konya, a city in the Central Anatolia Region of Turkey, boasts the country’s first grid-connected photovoltaic power plant. The system generates around 300,000 kWh annually.

Turkey has also introduced feed-in tariffs for solar power, as well as increased remuneration for using PV components manufactured within the country. However, the authorities require an extensive amount of supporting evidence before granting these incentives. High levels of insolation of up to 1,500 kWh per square meter in south and south-east Turkey also create favorable conditions for photovoltaics, and the Turkish market is expected to undergo a significant upturn. In order to minimize currency risk for foreign investors, the feed-in tariffs below are quoted in US cents. The government in Ankara pays 13.3 US cents (around 10 euro cents) for every kWh of solar power generated. Added to this are incentives for using components manufactured domestically, which amount to as much as 6.2 US cents. While plants with a rated output of less than 500 kW do not require any approval, licenses are required for larger power plants, and the addition of new capacity up to 2013 was limited to 600 MW. Moreover, individual plants may not exceed capacities of 50 MW. The electricity demand in Turkey is set to double by 2020, meaning that shortages in the power supply are expected from 2017. 200 MW of new capacity are expected to be installed in 2013, with these figures set to rise to 600 MW in 2014 and 1.2 GW in 2015. In contrast, only 2 MW of capacity were installed in the country in 2012.

The Balkan states are yet to play a significant role in the large-scale installation market. Falling system prices could, however, prompt moderate growth in Bulgaria (2012: 767 MW) and Slovenia (117 MW). Both countries have introduced feed-in tariffs which are significantly higher than those in Germany and Italy. In Ukraine, large-scale solar power plants with capacities of 100 MW were installed, predominantly in the southern regions around Odessa and along the Black Sea coastline.

The future course of development in Poland is rather uncertain, as although the government in Warsaw is working on a law to promote renewable energy that also intends to include a feed-in tariff for solar power, this shall not be passed before the government’s 2013 summer break. As a result of the weak grid, connecting large-scale power plants is expected to prove particularly problematic.

It can generally be assumed that the market for MW-scale installations in Europe will become increasingly difficult. However, the direct marketing of solar power modeled on the USA’s Purchase Power agreements is paving the way towards independence from government subsidies. The first of Germany’s solar power market sectors (in particular roof-mounted systems) are expected to fall below grid parity in 2013/2014. In Italy and Spain, this milestone has already been reached for ground-mounted photovoltaic systems. However, large-scale photovoltaic installations do not compete with the electricity price paid by end customers (private households and/or companies), but rather with the market price of peak load power.

North America

With 250 MW (AC) of solar power connected to the electricity grid, the Agua Caliente Solar Project, which is located 65 miles east of the city of Yuma, Arizona (USA), is one of the world’s largest operational PV power plants.
Photo: First Solar

Electricity from solar power has already achieved grid parity in southwest USA and Hawaii. Colossal solar parks capable of delivering a total capacity of up to 750 MW are being planned or are already under construction in California, Arizona, New Mexico and Nevada. In addition to the high prices of peak load power, Investment Tax Credit (ITC) incentives of up to 30 percent are stimulating growth. However, these are set to fall to ten percent by 2017. Some states launched new incentive programs in 2012 to support the installation of small roof-mounted installations, while the building of large-scale solar power plants continues to follow the regulations governing power plant construction. The announcement that the major American investor Warren Buffett was purchasing two solar power plants in California caused a stir in the fall of 2012. The investment, which amounted to around 2.5 billion US dollars (1.8 billion euros), saw Buffett acquiring the Antelope Valley Solar 1 and 2 power plants in California. The two power plants, which boast a cumulative capacity of 579 MW, are expected to be connected to the grid by the end of 2015.

In the hot regions of North America, electricity is most expensive around midday, when air conditioning and cooling systems in homes, supermarkets, factories and public utility companies are working at full capacity. Power suppliers usually start up gas power plants to cover these peak periods. Solar power produces its highest yields during the middle of the day, however, meaning its yield curve corresponds perfectly to demand. In the USA, large solar farms are almost exclusively financed by ten-year supply agreements for solar power known as PPA. The average price, which varies according to regional conditions, is roughly 20 US cents per kWh and guarantees a profitable investment.

EPIA puts the amount of newly installed capacity at 3.3 GW in 2012, compared to 1.9 MW in 2011. Analysts estimate that the market in the USA will grow by 4 GW during 2013 and predict an increase of 30 percent each year until 2016.

The Sarnia Solar Farm in Ontario (Canada) produces 80 MW of solar electricity annually. A portion of the site is also home to a 100-acre tallgrass prairie restoration project that creates new habitats while increasing soil stability and water quality.
Photo: First Solar

New solar parks are also being planned south of the border between the USA and Mexico with the aim of exporting solar power to the USA. Feed-in tariffs have either recently been launched or are due to be introduced in a few Caribbean countries. Puerto Rico, for example, intends to cover a third of its electricity demand of 3 GW with solar power by 2020.

In Canada, the province of Ontario, in particular, has seen a high number of new installations. However, the Green Energy Act introduced in 2009 expired in January 2012, and the government has announced plans to cut the feed-in tariffs by 20 percent. According to data from EPIA, around 268 MW of solar power were installed in Canada in 2012 (2011: 497 MW).

Saudi Arabia: The ground-mounted photovoltaic plant with a peak output of 3.5 MW is located in Riyadh in the grounds of the KAPSARC (King Abdullah Petroleum Studies and Research Center), the largest oil research center in the world.
Photo: Phoenix Solar AG

The Middle East

Photovoltaic markets are still in their infancy in the Horn of Africa, the Persian Gulf and the Middle East. Saudi Arabia’s level of insolation is roughly 2,200 kWh per square meter, which is approximately double the average level in the area between the North Sea and the Mediterranean Sea. The Saudian Arabian government has announced plans to cover a tenth of its energy requirements with solar energy by 2020 and it hopes to install around 5 GW of solar power. Investors have so far pledged around three billion US dollars for photovoltaic generators. There are currently several medium-sized solar farms in Saudi Arabia with outputs of up to 10 MW. Larger solar farms are to be funded through auctions and calls for tenders, and it is hoped that this will lead to between 1 and 2.2 GW being installed by 2015.

A large number of investments are also being made in photovoltaic installations in Qatar and Jordan. A solar power plant with an output of 200 MW is being planned in Oman and will be installed over the next few years. A 1,000 MW solar farm is also set to be installed in Dubai. The Mohammed bin Rashid Al Maktoum Solar Park, which is currently estimated to cost 2.4 billion euros, will cover an area of 48 square kilometers. The first step is to construct a 10 MW photovoltaic power plant, which will be connected to the grid in 2013.


The 1.3 MW PV power plant in Guangming New District, Shenzhen (China) covers about 23,000 square feet of roof space, and is constructed of 13,000 amorphous silicon thin-film modules.
Photo: DuPont Apollo Limited/China Everbright International Limited

A 20 MW PV system on an industrial rooftop in Guangdong: In southern China’s province of Guangdong, abundant industrial rooftops provide the basis for the “Thousand Factories, Thousand Megawatts” program.
Photo: Sky Solar

China may be the most important market of the future for photovoltaic power plants, but it is also the most challenging. According to data from EPIA and Solarbuzz, the Chinese photovoltaic market grew by 5 GW in 2012, meaning that the solar power plant capacity in the Middle Kingdom more than doubled in one fell swoop. Since the beginning of 2012, Beijing will pay one renminbi per kWh solar power (approximately 11 euro cents). The Chinese aim to install around 5 GW of capacity every year until 2015. Large solar farms make up the majority of new photovoltaic installations in China. While merely a few demonstration projects were installed between 2009 and 2011, the Chinese market is now on the verge of enormous growth. The majority of utility-scale plants are being installed in Western China, Inner Mongolia and Tibet. Here, the solar power plants belong to the state and are regarded as infrastructure projects, which are constructed through calls for tender.

The insufficient state of the power grid is the greatest hindrance to development. In the province of Qinghai, where roughly half of China’s large solar farms are located, around 1 GW of capacity was newly installed in 2012, but only 50 percent of it was connected to the grid in good time. Above all, there are not enough transformers for the 380 kilovolt (kV) transmission lines. In Tibet, the construction of a 220 kV line to connect additional solar power plants has been delayed.

The solar park in the Thai city of Ayutthaya, which is located around 70 km from the capital Bangkok, has a capacity of 3 MW.
Photo: Conergy Deutschland GmbH

India: The 600 MW Gujarat Solar Park (close to the Rann of Kutch at the border with Pakistan) is an innovative concept designed by the state government to promote solar installations in which the government allocated developed land to the project developers with the entire infrastructure intact.
Photo: SEDA Malaysia

India and Thailand

India is ideal for solar power, in spite of the high investment costs of 12 to 13 percent which inhibit the market. In India, a great deal of electricity is produced off-grid with diesel-driven generators. According to data from EPIA, the LCOE for solar power is between 14 and 16 euro cents, making it competitive in comparison to diesel power, particularly in light of the country enjoying around 300 days of sunshine every year. Especially in the western and southern parts of the sub-continent, insolation is very high and evenly spread. By the end of 2012, 1.206 MW of solar capacity had been installed, with around 1 GW newly installed capacity in 2012. The states of Gujarat, Rajasthan and Madhya Pradesh in particular put out large-scale power plants to tender.

The state of Jharkhand aims to install around 500 MW by 2017 and 2.2 GW by 2020. In West Bengal, where at the start of 2012 only one power station with an output of 2 MW was in operation, the aim is to install around 500 MW by 2020. Additionally, Chhattisgarh has set itself the target of installing 1 GW by 2017.Photo: Conergy Deutschland GmbH Meanwhile, Thailand aims to increase its solar capacity by approximately 500 MW by 2020 in order to achieve its target of covering 20 percent of its electricity requirements with solar power. This market is driven by PPA. The state puts power plants out to tender, fixing the purchase price of solar power at 19 euro cents per kWh for ten years, but in 2012, the price fell to 15.2 euro cents. By mid-2011, solar power plants with a total capacity of around 3.4 GW had been proposed in Thailand but the grid is the major hindrance to progress here as well. The amount of newly installed capacity amounted to around 210 MW in 2012.

Japan, Malaysia and the Philippines

Cagayan suburbs (the Philippines): The PV plant with a total output of 1 MW uses 6,480 polycrystalline silicon modules that produce around 1,300,000 kWh of electricity per year.
Photo: dpa Picture-Alliance GmbH

PV production plant in Malaysia
Photo: Q-Cells International GmbH

A demonstration project of a smart grid in the village of Rokkasho (Japan), incorporating the world’s first wind and photovoltaic plant that stores its power in bespoke large-scale batteries.
Photo: Toyota

Following the nuclear reactor disaster in Fukushima, Japan has rejoined the world’s largest solar nations. In 2012 2 GW of new solar capacity were installed (2012: around 1.3 GW). The Japanese market is similar to Germany’s, however, in that it is dominated by small roof-mounted installations. The on-site consumption of solar power is playing an increasingly significant role, as Japan has the highest electricity prices worldwide. All of its 45 nuclear power stations are not connected to the grid anymore, production capacities of conventional systems there have reached their limit. In the Greater Tokyo Area, industrial companies must reduce their electricity demand by around 15 percent or are forced to generate the same amount using their own solar power.

New, lucrative feed-in tariffs have been in effect since July 2012 which are boosting the market. Small private plants, on the other hand, are no longer receiving any remuneration whatsoever because on-site consumption allows them to pay for themselves. Ten Japanese energy suppliers are planning to make consider able investments in utility-scale solar farms. Feed-in tariffs have been introduced for both roof and ground-mounted installations of 10 kW and above. The tariffs are graded to ensure that large solar parks and B2B installations with large solar outputs will chiefly be developed. Remuneration is fixed for the solar power from each installation for ten years, after which it is phased out in several stages.

A feed-in tariff for solar power was introduced in Malaysia as early as at the end of 2011. Installations with outputs of more than 10 MW can expect to receive around 20 euro cents per kWh. However, solar farms with a total capacity of over 30 MW receive no subsidies whatsoever. A feed-in tariff amounting to around 60 euro cents per kWh has also been paid in the Philippines since the end of 2011. The country has been struggling with rising electricity prices, and discussions on whether to lower the tariff to approximately 30 euro cents are ongoing.

The Mallee Solar Park in the Australian state of Victoria has a capacity of 180 MW and uses CdTe modules.
Photo: Truenergy


Like the southwest USA, Australia requires a lot of electricity for air conditioning and cooling systems during the summer. In 2011, electricity during the peak midday period was sometimes offered at record prices of 10,000 Australian dollars per megawatt hour (MWh). The standard price is between 35 and 50 dollars. The use of photovoltaics is therefore highly attractive in Australia, since solar installations generate most electricity during the middle of the day. The extreme peak prices yield considerable profits. According to figures from EPIA, capacity installed in 2012 alone amounted to 1 GW, a slight growth compared to 2011 (837 MW). Increasing numbers of large-scale installations are set to be constructed in Australia to stabilize energy supply and lower electricity prices during the summer.

Africa and South America

Solar installation on the Cape Verde Islands: The continent of Africa is beginning to exploit its enormous potential for generating renewable energy.
Photo: Stiftung World Future Council

Having completed the first phase in just ten months, the power plant in La Huayca (Chile) aims to increase its 1.4 MW output to 30 MW by 2013.
Photo: Solarpraxis AG/Becky Beetz

As of yet, the photovoltaic markets in Africa and South America have hardly got off the ground. In 2011 und 2012, Kenya and South Africa became the first African countries to install large plants. During the course of 2012, initial plans were drawn up to construct several solar power plants each with capacities greater than 70 MW. Thanks to its relatively well developed infrastructure, stable financial system and advanced grid, South Africa has been awarded the accolade of being the sunny continent’s market leader. Here, the World Bank plays a considerable role in funding the power plants.

In South America, further drops in the price of solar technology should stimulate significant market growth. Increasing attention is being paid to solar power plants in Chile and Brazil in particular. The sunny, dry plateaus of the Andes are particularly ideal for solar power plants. The first pilot power plant with an output of 1.4 MW, which supplies a nearby copper mine, was installed in northern Chile in 2012.

In addition to providing millions of people in South America and Africa with power for the first time, photovoltaic power plants on these continents also make it possible to provide precious drinking water at a low cost, support communication networks and store vital medicine and food in air-conditioned storage areas.

State of play: May 2013

Tables and charts

Fig. 1 Module price trends

Fig. 2: Germany: installed capacity 2012

Source: Bundesnetzagentur/Solarpraxis AG (figures are rounded)