Solar Catches Up With Wind: Growing Neck-in-Neck Worldwide

For the first time, more solar will be added to the world’s grid this year than wind.

About 36.7 gigawatts (GW) of solar is expected to be installed this year compared to 33.8 GW of onshore wind and 1.7 GW  of offshore wind, says Bloomberg New Energy Finance.

That’s because this is the worst year for wind installations since 2008 – down 25% – largely because of policy uncertainty in the US and China. Last year, new wind capacity totaled 46.6 GW, much more than solar at 30.5 GW – but both were record figures. 

Going forward, wind and solar PV are expected to grow neck-in-neck through 2030 – expanding at about the same rate, says New Energy Finance.

Wind is expected to grow from 5% of the world’s total installed capacity in 2012 to 17% in 2030. Solar PV is projected to grow from 2% today to 16% of world energy generating assets by 2030.

The costs for both utility-scale solar and wind have dropped by half in the past four years, reports financial services firm Lazard Freres. Utility-scale solar PV competes on price for peak energy with conventional generation in many parts of the world, without any subsidies.

And after years of oversupply and consolidation, technology suppliers in solar and wind may return to profitability this year.

"Cost cuts and a refocusing on profitable markets and business segments have bolstered the financial performance of wind turbine makers and the surviving solar manufacturers. Stock market investors have been noticing this change, and clean energy shares have rebounded by 66% since their lows of July 2012," says Michael Liebreich, CEO of Bloomberg New Energy Finance.

Solar Manufacturing Trending Upward

Some of the top solar manufacturers are producing at full-tilt again and even considering expanding. Consolidation in the solar industry has left fewer players.

Trina Solar, SunPower and JinkoSolar are all producing at their maximum and may boost capacity next year because of rising demand in Japan and China. Each country could install over 9 GW of solar this year. 

Trina’s gross margin rose to 11.6% in the second quarter and expects to return to profitability in the fourth quarter. Jinko reported its first profit since 2011 in August, with margins doubling to 17.7% in Q2. 

These results mark "the turning point for the PV module industry and a return to profitability," Stefan de Haan, a solar analyst for IHS Inc. told CleanBiz.Asia

And China announced its new official solar target is 35 GW installed by 2015. It has 3 GW of utility-scale solar so far. If the country can achieve that spectacular growth in installations, it will surely be a boon to its domestic solar manufacturers.

Same for Wind

Business is similarly looking up for the major wind manufacturers. Vestas, Nordex and Gamesa are all turning the corner on profitability this year, the first time since 2010. Share prices for the three companies are up an average of 220% this year.

Turbine prices are stabilizing and orders are up for 2014. Vestas, for example, just won a 400 MW order from Duke Energy to supply wind farms in Texas.

"Overcapacity and the price war was a big part of the crisis," Juergen Zeschky, Nordex CEO told Bloomberg. "Now companies are doing their homework and becoming more efficient, optimizing their processes and achieving further cost reductions."

In the second quarter, global investment in clean energy rose 22% to $53.1 billion, with utility-scale solar and wind projects receiving the most financing, says Bloomberg New Energy Finance.

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