- The global solar industry will likely face a contraction this year, largely due to China's decision to reduce installations. However, that course change is likely to depress panel prices, say analysts, leading to a possible rebound in 2019.
- The most recent estimates come from Goldman Sachs Group, which expects global capacity installations to slide 24% this year to about 75 GW, compared with 99 GW in 2017.
- Other analysts have predicted more modest declines, but the trend remains towards contraction: Bloomberg New Energy Finance expects a 3% global decline, while Credit Suisse Group AG predicts a 17% decline.
A decline in global solar installations would mark the first contraction in the industry. Between China's decision to cut subsidies for large installations, and President Donald Trump's tariffs, 2018 has been a tumultuous year for the industry.
China's decision, according to Goldman analysis, could lead to a 40% drop in sales in that country — amounting to about 20 GW of capacity. However it is unclear if there is a large impact from the tariffs approved by the White House in January.
The Solar Energy Industries Association said the tariffs would "create a crisis" for the industry and could lead to job losses. But a rapid decline in panel prices has helped mute the tariffs' impacts
In April, GTM Research Senior Solar Analyst, Colin Smith, told Utility Dive the tariffs will "shrink the total addressable market for U.S. utility-scale solar," but added that the industry will still see "consistent increases in new capacity year over year." However in May, Cypress Creek canceled 1.5 GW of planned capacity as a result of the Trump administration's decision to impose 30% tariffs on imported panels.
BNEF told Bloomberg it expects China's dominance of the solar market will decline in a few years — last year it accounted for more than half the market— and that the lower prices as a result of this year's slump could result in growth in 2019 and 2020.