Via GigaOm, an interesting report on the next “hot” markets for investors:
“…The next hot solar markets for investors, according to a report from Lux Research, aren’t exactly the obvious ones commonly bandied about at solar conferences. But looking at the internal rates of returns (IRR), which basically considers the capital investment needed and determines how profitable an investment in a project will be, the top solar markets of tomorrow will be: New Jersey, Portugal, Australia, Italy, and India.
How hot the geographical market is depends entirely on the state or country subsidies available. Take New Jersey, the lead market in Lux’s report, which has both a strong state renewable portfolio standard, and incentives called Solar Renewable Energy Credits, or SRECs, which are credits that can be traded on a market.
As we described in an article earlier this year, New Jersey’s solar market started to ramp up in 2010, installing more than 25 MW per quarter in the first three quarters, then grew to installing more than 50 MW in the last quarter. The pace continued into 2011 with as much as 15-20 MW of new capacity being installed each month.
Ucilia has pointed out how India, Lux’s fifth choice, could be a massive largely untapped market for solar companies. Part of the reason is that last year India published a policy called National Solar Mission that called for adding 20 GW of grid-tied solar energy generation capacity and 2 GW of off-grid projects by 2022. In addition, the Indian state of Gujarat also has its own solar incentive program.
The result of India’s goals, as well as a wide-spread lack of access to electricity, has made the country an interesting solar market for large players like First Solar and Suntech Power. First Solar CEO Rob Gillette said in a recent earnings call that the Indian market “has changed meaningfully in a positive way,” and said “We are putting people on the ground and figuring out ways for First Solar to have a leading position.”
While the number one determining factor for a hot solar market continues to be policies, solar prices have also dramatically dropped over recent months. That’s good news for solar buyers and consumers, but not such good news for companies that don’t have the lowest cost manufacturing — Solyndra, SpectraWatt and Evergreen Solar all have announced bankruptcy plans in recent weeks. Solar is now a commodity, which means it’s maturing and that’s what we need to push it into the mainstream.
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