The International Energy Agency Photovoltaic Power Systems Programme's (IEA-PVPS) annual report on Trends in Photovoltaic Applications is one of the most definitive and comprehensive reports on the global solar industry.
The 2015 report's sections on markets and manufacturing document the shift of both from Europe to Asia, trends which are hardly surprising to anyone in the industry. However, halfway through the 64-page report is a lesser-known detail: that incentivized self-consumption and net metering programs are becoming increasingly important policy supports for global PV markets.
Feed-in tariffs still remain the most important policy supports and drivers of global demand. However, according to IEA feed-in tariffs, including those awarded through tenders, accounted for only 64% of the global market in 2014, whereas historically these drove 67% of the market.
The share of markets driven by direct subsidies, such as the United States' 30% federal investment tax credit, likewise fell from 20% to 16%. Instead, the policies that are gaining the most ground are incentivized versions of self-consumption or net metering policies. IEA-PVPS estimates that these policies drove 16% of the global market in 2014, up from only 5% historically.
IEA-PVPS does not break this down by nation, and so it is not clear how demand is broken down in nations which have implemented multiple policies, such as the United States.
However, there is a clear relationship between a shift in policies and geography. As European nations including Spain, Italy, German and Czech Republic reduced, closed or eliminated their feed-in tariffs, China and Japan began implementing the policy. This lead to these nations becoming the world's two largest solar markets.
Likewise, in the very European nations where feed-in tariffs are no longer an attractive option or in many cases an option at all, self-consumption has come to fill in as an alternative business model for PV system owners. This is happening in the context of much smaller overall markets.
Italy and Germany are all examples of this phenomenon, and IEA-PVPS found that a significant portion of the PV generation in both nations comes from self-consumption. Additionally, as the U.S. residential solar market continues to grow under net metering, this brings up the numbers for the two policies.
As happened with feed-in tariffs, net metering and self-consumption are coming under attack in the markets where they are most successful. Earlier this month Spain's center-right government imposed its “sun tax” on self-consumption systems and Germany is currently seeking to impose an even higher portion of the feed-in tariff surcharge on PV system owners who participate in self-consumption.
Meanwhile, in the the United States, regulators in a number of states are currently considering requests to impose charges on customers who participate in net metering. This is despite many of these challenges proving unsuccessful in the past.
And while there has been much news of competitive solicitations to award power purchase agreements in India, Chile, Brazil and other nations, IEA-PVPS says these supported a mere 1% of the PV that went online in 2014. These numbers are expected to improve in coming years as projects awarded under these large solicitations are completed.