Solar Power » Market

The Market for Solar Photovoltaics

Solar Penetration vs Installed Capacity

Solar penetration is the percentage of electricity generated by solar in a national grid. High penetration is an indicator of a more mature solar market. Low penetration says: here is a lot more room for solar generators.

As can be seen in the chart, Germany has the highest solar penetration, but only the 4th largest installed capacity. Interestingly, in the 2nd biggest market by installed capacity, the USA, solar plays only a minor role in the nationwide power mix with 2%.

New Installations

The diagram below shows annual new builds from 2008 - 2018 with breakdown by geographies on the right. The solar market, once captured almost entirely by Europe, has drastically expanded to Asia, particularly China. It is a truly global market.

Where are the best markets?

That depends on one's definition of "best" or risk appetite.

  • Hot emerging market: low installed capacity, low penetration, significant new build showing activity
  • Low risk, mature market: these markets have a relatively high penetration with an already established base.
  • Dormant market: a low "new build-to-installed capacity" ratio typically means there is a base, but no new significant activity, most likely for regulatory reasons.
  • Riskier, future market: low installed capacity, low penetration and no sizeable new build. Solar can work anywhere, so why not here?

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