ThiscontentisforthesoleuseofSanjayBhallaworkingforInfrastructureLeasingandFinancial

ServicesLimited.

(Note:Wewillupdatecapacitiesandotherrelateddatafor2014assoonasitisreleased.)

Theglobalinstalledsolarphotovoltaic(PV)capacityincreasedbynearly48percentyoyto138.9GW
in2013.Globally,38.4GWofcapacitywasaddedin2013,ledbyUSA,China,GermanyandJapan
whichtogetheradded26.9GWorcloseto60percentoftotalcapacityaddedduringtheyear.Intermsof
cumulativeinstalledcapacityasofDecember2013,Germanyisthemarketleaderwithatotalinstalled
baseof35.2GW.However,itsshareintheworld'sinstalledcapacityhasdecreasedto24percentfrom
38percentayearago.ThisdeclinewasduetosignificantincreaseincapacityaddedbyUSA,Chinaand
Japan.

GlobalcumulativeinstalledsolarPVpowercapacity20032013

Source:EuropeanPhotovoltaicIndustryAssociation(EPIA),CRIISLResearch

SolarPVcapacityadditionsandinstalledbase(2013)

Note:Japan*ProvisionalnumberasofDecember2013

Source:EPIA,CRIISLResearch

EuropecontinuestodominatethesolarPVmarketandaccountfor55percentoftheglobalinstalled
capacity.While,ChinaandAsiapacificregionstogethercontrolabout27.9percentofthetotalsolarPV
installedcapacity.

Germany
GermanysustaineditsleadershipinthesolarPVmarketbyadding3,304MWin2013.Asaresult,its
installedcapacitygrewby9percentyoyto35.2GWin2013.ThisgrowthisdrivenbytheRenewable
EnergySourcesAct(throughEEGschemeErneuerbareEnergienGesetz)offerspreferentialfeedin
tariffs(withdegressionrateasexplainedbelow)forrenewableelectricity.ThePVmarketalsoreceives
supportfromtaxcredits,loanforprivatePVinvestments,communityPVinvestmentsandcommunity
infrastructureinvestmentsfrombanks,etc.Moreover,declineinpricesofPVsystemsby66percent
havealsoledtoagrowthofPVmarketinGermany.

CumulativeinstalledPVpowercapacityinGermany


Source:EPIA,CRISILResearch

Amendmentsmadeinfeedintariffs

Germanfeedintariffs(FiTs)havebeenstructuredinsuchawaythattariffsarereducedbyafixed
percentage(thedegressionrate)everymonthinaccordancewithamarketlinkedmechanism.
ThisamendmentcameintoeffectfromApril2012andreplacesanearlierrulewhichimplemented
anannualdegression.Ifcapacityadditionisaboveorbelowapredefinedcorridor(2500MW
3500MWfor2012),thebasedegressionrateincreasesordecreasesasperafixedformula.
TotalsolarcapacityexpansionseligibleforFiTsarefixedat52GW(36GWoftargetisalready
achievedasofDecember2013).Beyondthisthreshold,electricitygeneratedfromnewinstallations
willnotreceivefeedintariffs.

FeedintariffsforvarioussolarPVsystems(Centsperunit)


Source:EPIA,CRISILResearch

Spain
TotalInstalledcapacityincreasedby3.4percentyoyto5.3GWin2013.However,thecapacityadded
in2013waslowerby37percentascomparedtopreviousyear.Thisdeclinewasprimarilydueto
discontinuationoffeedintariffin2013.However,aftersuccessivetariffreductionsince2009,therewas
adropingrowthoftotalPVinstalledinthecountry.

CumulativeinstalledPVpowercapacityinSpain


Source:EPIA,CRISILResearch

Japan
Installedcapacitygrewsignificantlyby102percentyoyto13.9GWbytheendof2013.Japanadded
over7GWMWofsolarPVcapacityin2013asagainst2GWaddedin2012.ThegrowthinPV
installationshasbeendrivenbyintroductionoffeedintariffsinJuly2012.Moreover,significant
increaseinutilityandcommercialinstallationhasalsoledtohealthygrowth.OutoftotalsolarPV
installedin2013,80percentoftheinstallationaccountsfromutilityandcommercialsegment(asagainst
40percentin2011)whilethebalancebyhouseholdsegment.

CumulativeinstalledPVpowercapacityinJapan

Note:*2013PVinstallationnumberisprovisional

Source:EPIA,CRISILResearch

TheMinistryofEconomy,TradeandIndustry(METI)decidedtopromotetheuseofPVsystemsthrough
asubsidyprogramforresidentialPVsystemsandnewlawsforthepurchaseofsurplusenergy.To
promoterooftopinstallations,subsidyintherangeof30,000JPY/kWto35,000JPY/kWwasprovided
toindividualsandcorporatesin2012installingresidentialPVsystems.

ElectricutilitiesareobligedtobuysurpluspowerproducedbyPVsystemsatpreferentialtariffs.The
feedintariff(FIT)programforrenewableenergypowergenerationfacilities(effective
fromJuly2012)areasunder:

42JPY/kWh(incl.tax)forPVsystemswiththecapacityof10kWormorefortheperiodof20
yearsand
42JPY/kWh(incl.tax)forPVsystemswiththecapacitybelow10kWfortheperiodof10years.

Thecountry'sincreasingfocustowardsrenewableenergysourcesisexpectedtodrivestronggrowthin
thenextfewyears.

China
SolarPVcapacityadditionmorethandoubledto10.5GWin2013ascomparedto5GWintheprevious
year.ThegrowthinthesolarPVmarketisdrivenbytwonationalcapitalsubsidyprogramsintroducedin
2009the'BuildingIntegratedPhotovoltaic(BIPV)programandthe'GoldenSun'program.Moreover,
despitesharpdeclineincapitalcosts,feedintariffofCNY1perkwh(expiredfromJanuary2014)has
alsoledtosignificantincreaseinsolarPVcapacityadditionsduring2013.

CumulativeinstalledPVpowercapacityinChina


Source:EPIA,CRISILResearch

Chinahasanambitioussolarpowertargetof100GWby2020.In2013,thecountryreducedthefeedin
tarifftoCNY1.0perunitfromatariffofCNY2perunitin2010inlinewithdropincapitalcosts.

DeclineinPVpricesandfeedintarrifsover20072013

Source:EPIA,CRISILResearch

UnitedStatesofAmerica(USA)
Withinstalledcapacityof7,777MW,USAisthefourthlargestgloballyintermsofinstalledPVpower
capacity.Capacityadditionsshowedsignificantincreasein2012with3,346MWofcapacitybeingadded
in,asopposedto1,867MWayearearlier.Capacityadditionshavebeendrivenbytaxcredits,FiTs,
renewablepurchaseobligations(RPOs)andloansandgrantsbygovernment.Sharpdeclineininput
pricesalsosupportedthecapacityadditions.

CumulativeinstalledPVpowercapacityinUSA


Source:EPIA,CRISILResearch

Eachstatehasaseparateincentivemechanismtoboostsolarpower,intheformofFiTs,netmeteringand
purchaseofRenewableEnergyCertificates(RECs).Rooftopinstallationsbasedonnetmetering
iswidelyadopted.Statemandatesforrenewableelectricityhavefueledgrowthofutilityscaleprojects,
thelargestofwhicharematerializinginwesternUnitedStates,particularlyinCalifornia,Arizonaand
Nevada.StatesofCalifornia,NewJersey,Florida,ColoradoandArizonaareleadingthecountry'ssolar
PVinstallations.

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