IEA upgrades renewables forecast as solar PV continues to break new records

Despite pandemic-induced supply chain challenges and construction delays, the energy watchdog said in its latest Renewable Energy Market Update that there was a 23% year-on-year expansion of new PV installs in 2020 to almost 135GW – lower than the 141GW amount put forward from BloombergNEF (BNEF).

The figure is significantly above IEA’s projection in its renewables report from last year, which said PV additions would decline from the 109GW of capacity deployed in 2019 to over 90GW in 2020.

With PV now the lowest-cost option for electricity generation in many countries, the IEA forecasts annual solar PV expansion to reach 145GW in 2021 and 162GW in 2022, breaking records and accounting for almost over 55% of all renewable energy expansion this year and next. The share of utility-scale applications in annual PV additions is forecast to increase from over 55% in 2020 to almost 70% in 2022.

In a report published in February, BNEF said PV installs could reach as much as 221GW in 2022 and 240GW in 2023, however these figures may be a little optimistic given the polysilicon supply constraints that have since been revealed.

In terms of all renewables additions, 2020 saw installs grow at their fastest rate in two decades – up 45% year-on-year to 280GW – leading the IEA to raise its deployment forecast by more than 25% on previous estimates, as governments auction record amounts of capacity and interest in corporate power purchase agreements (PPAs) continues to grow. The agency’s report from last year had forecasted deployment to be severely hit by coronavirus-related challenges, forecasting just 167GW of renewables additions in 2020.

According to the IEA, the increase in 2020 is set to become the “new normal” despite a slowdown in China following an “exceptional expansion” that resulted from developers rushing to complete projects before subsidy phase-outs.

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