Analyst firm Frost & Sullivan has released a positive yet cautious report into the prospects for the solar industry through to 2020. While noting that PV costs have come down, the report concludes that for solar to continue to grow, it will require ongoing subsidies.

Frost & Sullivan predicts a doubling of solar industry revenues over the next seven years. Few industries would consider this a bearish prediction, however set against the rapid growth PV has experienced in the first few years of this decade, the forecast is somewhat conservative.

The Global Solar Power Market report notes that policy decisions will drive the PV market in the forecast period and that: Drafting strict clean energy regulations and offering adequate subsidies to the renewable energy sector will be essential, for solar to continue to grow.

In a press release announcing the reports release, Frost & Sullivan note that the potential of solar has been reined in by high installations and maintenance costs of solar PV systems. These factors coupled with the intermittent supply of solar power and the low return on investment of solar PV systems, the report states, means that solar faces stiff competitive pressure from wind and bioenergy.

The global solar power market is benefiting from various incentive schemes in the form of tradeable green energy certificates, FITs, subsidies, and tax rebates for the use of renewable energy for power generation, said Frost & Sullivan energy & environmental industry analyst Pritil Gunjan, in todays statement. However, these incentive schemes continue to be very heterogeneous, making solar PV penetration rates vary widely based on local and regional policies.

Popular content Geographically, China, Japan, India and Australia will drive the Asia Pacific Region, which will account for 46% of annual demand in 2014. By 2020 Germany, France Spain, Italy and the United Kingdom will have installed 75 GW of PV capacity. Rather confusingly, Frost & Sullivan write that the U.S. has become a "lucrative destination" because of system price declines, due to anti-dumping duties. The United States has become a lucrative destination as the price of solar PV systems in the region has declined due to the reduction of imports from China following the imposition of anti-dumping and illegal subsidy tariffs on imports. Frost & Sullivan conclude, in a sentiment that many in the industry would agree with, that government incentive guidelines need to clear and stable so that, developers, investors and customers are not mislead and can make proper investment decisions. This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com. Share Jonathan Gifford Jonathan is the Founding Editor of pv magazine Australia. Jonathan joined pv magazine in 2011 and became the Editor in Chief in 2014. More articles from Jonathan Gifford Related content Elsewhere on pv magazine...