Newly installed solar power capacity is expected to increase about 38 percent next year, thanks to a lower-than-expected feed-in-tariff (FIT) reduction of 3 percent, TrendForce Corp (集邦科技) said yesterday.
The forecast is based on the assumption that the government would reach its target of increasing photovoltaic capacity to 6.5 gigawatts (GW) next year, the Taipei-based researcher said.
New solar power installations are expected to surpass last year’s 970 megawatts (MW), even though a row over the Ministry of Economic Affairs’ FIT policy has delayed deployments in the first half, the researcher said.
Photo: Liberty Times
The ministry last year proposed a 12.5 percent reduction for ground-mount solar systems, raising concerns among green energy companies about potential returns.
However, the ministry in January compromised for an average reduction of 4.5 percent annually for new solar capacity deployed this year.
With the ministry planning to reduce FIT rates for solar energy to 0.34 to 2.44 percent annually to benefit installations, newly installed solar capacity is expected to rise from 1.59GW this year to 2.2GW next year, TrendForce said.
“The new FIT for 2020 is preliminarily set to be 3 percent lower than this year. The smaller cut is to boost solar installations and help the government reach its solar installations goal,” TrendForce analyst Sharon Chen (陳君盈) said in a statement.
At least 550MW of new solar capacity must be connected to the grid each quarter of next year for the government to reach its goal, Chen said.
Most medium-scale ground-mount solar installations with a capacity limit of 50GW would not be connected to the grid until the third quarter of next year, while large-scale systems would come even later, in the second and third quarters of 2021, the company said.
Land availability and feeder line deployment are key issues stalling the deployments, it added.
Taiwanese solar module suppliers are shifting their focus to the home market by diverting more than 60 percent of shipments back to local clients, focusing on the nation’s fast-growing solar market, the researcher said.
TrendForce expects solar module prices to fall 6 percent annually next year, as most suppliers are not planning to expand capacity.
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