NEW REPORT FROM IEO
"Photovoltaic market in Poland 2020"
Summary and conclusions
The photovoltaic (PV) market is growing the fastest among all renewable energy sectors in Poland. The total installed power in photovoltaic sources was almost 1500 MW at the end of 2019, and in May 2020 it exceeded 1950 MW. Currently, the largest increase in new power is observed in the micro-installations segment, which means a large activity of individual and business prosumers. In 2019, Poland achieved an increase in new power of about 0.9 GW and with a share of the increase in power of 5.5%, it was in the top five in the European Union. According to IEO forecasts, Poland will maintain the rate of installed power growth to the end of the year and will remain at the 5th place in the EU. IEO estimates that at the end of 2020 the power installed in PV in Poland may reach 2.5 GW. IEO forecasts also indicate that turnover on the photovoltaic market will increase this year compared to the previous one by even 25% and will exceed PLN 5 billion.
The observed and forecasted market growth is particularly pronounced in the prosumers and PV farm developers’ sectors and creates a market for installation and EPC companies as well as Polish manufacturers and equipment suppliers whose development provides new jobs and generates added value.
However, the spectacular successes of the industry should not lead to the belief that PV farms guarantee success forever the first trial period may be the years 2023-2024, when support systems will no longer work. Additional government action is needed - in addition to economic recovery packages that PV farms have not used, including accelerating the implementation of directives and preparing for the rapid absorption of new EU funds. Additional activities should lead to consolidation of the industry's position on the energy market, development of innovation and export of Made-in-Poland devices.
The global pandemic has proven the negative effects of placing most industrial production outside the EU area. The EU share in the global production of solar modules has dropped to the level of 5-6%. The production capacities of Polish producers of PV modules reaching 500 MW / year constitute 10% of total European production capacities. The projected rapid increase in power in the domestic energy system will cause the demand of the domestic market for uninterrupted supply of new PV technologies and reduction of dependence on supplies of new technologies and components from abroad.
The challenge faced by the industry and government administration is the creation of industrial policy (the same as in UE), optimal domestic market shaping, promotion of the export of Polish PV products and support for strategic plans of domestic enterprises. The Institute for Renewable Energy has made an initiative on public administration partnership and integration of the photovoltaic industry, initiating operation and cooperation under the "Industrial PV Panel". The declaration of representatives of the Polish solar industry has been signed by, among others: ML System, Bruk-bet, Solar and Hanplast, a number of other significant supply chain companies (fasteners, cables, accessories, etc.) have already joined or declare their willingness to join the initiative. The signatories, in response to announced government plans for photovoltaic development and based on measures initiated to support the domestic industry initiated in the EU and in Poland, declared that in 2021-2025 they are able to increase their production power 5 times, develop export potential accordingly (contribution to improving the national trade balance and the competitiveness of the Polish economy) and create up to 9,000 in the entire supply chain jobs.
In 2019, 640 MW of Power in micro-installations was installed, which means an almost three-fold increase year-on-year, already in the first quarter of 2020 about 300 MW of PV micro-installations were connected to the network. The large increase in the power of micro-installations in the first quarter of this year means that despite the onset of a pandemic (and the first signs of an economic slowdown), prosumers are still interested in investing in photovoltaics and the global pandemic limits the sector's development to a relatively small extent. At the end of 2019, micro-installations accounted for over 70% of the total power installed in photovoltaics.
Polish photovoltaics, unlike many other European countries, has now very prosumer and diffuse character. It results from the citizens' interest in energy production on their own, available support programs and friendly legal regulations, among others tax breaks. The "My Current" program that has been in operation for a year and the long-term EU support under the Regional Operational Programs are the pillar of the permanent development of the prosumer sector.
At present, renewable energy auctions are still the main driving force behind the PV farm market, especially those with a power of around 1 MW. In all auctions conducted so far, projects with a total power of almost 1,700 MW have won. In this year's auction, the volume for solar farms in the so-called "Small basket" (<1 MW) is planned for 800 MW, and in a large (> 1 MW) for a minimum of 700 MW. So far, about 370 MW have been put into operation at PV farms, which is about 20% of the total installed power in PV. Winners of the 2018 auction, due to the global epidemic and difficulties associated with it, may postpone the implementation of projects until May 2021. This means that in 2021 and 2022 there will be an investment boom in the PV farm sector, when all projects will be put into operation.
Forecasts for the PV market
The IEO forecast assumes an increase in the installed power in solar farm in 2020 mainly in the micro-installations segment. Then in the years 2021-2022 about 2.8 GW of PV farms will be put into operation. In 2022 and 2023, the share of PV farms in the total installed power will be equal to the share of micro-installations. The PV market will change from a typically prosumer one, just as it is now, on sustainable one between professional PV power plants and prosumers. According to Solar Power Europe scenarios from 2019, the power installed in Poland in 2023 will be 3.5-5 GW. IEO, taking into account all types of support in each sector and its current dynamics, proposes a more optimistic scenario.
According to the IEO forecast, the power installed in PV will reach 2.5 GW this year, and the growth rate of new power will remain at the same level as last year. In 2023, the PV power will reach 6.6 GW. In 2025, however, the total installed power can reach 7.8 GW, which means that already in 2025 installed PV power will exceed the power assumed in KPEiK on 2030.
Positive forecasts are also confirmed by leading companies from the PV industry that participated in market research. IEO analysis shows that companies are still planning rapid development, despite the temporary difficulties caused by the pandemic. The most frequently indicated direction of development was further increase in employment - after the employment in the industry at the end of 2019 reached 6,000 full-time jobs, as many as 90% of companies have again expressed their desire to increase the number of jobs. 85% of respondents plan to further increase production power. Half of the companies intend to introduce innovations to the offer, e.g. PV roof tiles or energy storage. The same number of surveyed enterprises intends to expand the company's operations, e.g. by offering operational services. Module manufacturers will systematically increase production power from 2020, introducing new technologies successively, and the construction of a silicon cell and tandem cell factory is planned in 2024. This shows that despite the economic slowdown, companies in the photovoltaic industry are preparing for a further increase in installed power and development of the PV market, and have ambitious plans that go beyond 2020, and with the state guarantee of market development at least until the end of 2022, i.e. until the whole economy should recover from the slowdown.
Photovoltaics will be instrumental in the breakthrough that begins the energy transformation. It is not only the main area of investment in renewable energy, but also in the entire Polish power industry. As the only renewable energy industry, it was able to mobilize more investment capital in the years 2019-2020 than all conventional energetics. It is also able to win the trust of Polish and foreign capital investors, which is confirmed by the IEO_PV stock index.
If you are interested in full ‘PV Market in Poland’ Report please click on the graphics below.