A new Pike Research study predicts that the market for utility-scale concentrated solar power will rebound in the coming decade.
“At the moment, the market for concentrated solar power (CSP) systems is paused — not stopped,” says the “Concentrated Solar Power” report, released May 2.
According to Pike Research, global annual revenue for CSP systems will rise from $2.1 billion this year to $5.1 billion in 2013, but will dip in 2014. However, the firm predicts that CSP revenue will rebound to at least $4.8 billion by 2020.
The market research firm says that part of the decline in CSP is due to falling prices of photovoltaics, and that many CSP projects in the works have been converted to PV as a result.
“A CSP revival was jump-started in 2004 as policy announcements at that time inspired investors and engineers to start developing again,” said the report. “The movement gained steam when PV prices peaked in 2008 resulting in a 300% gain in global CSP operational capacity from 2008-2011.”
But as PV prices declined – and as PV technology became accepted as a good investment – the growth in CSP halted in 2011.
The study notes a disparity between CSP projects awarded and those becoming operational in the U.S. – “while 6,886 MW have been awarded, only 1,532 MW (spread across five projects backed by U.S. DOE loan guarantees) are under construction” says the report.
Over 1,200 MW of CSP projects have been replaced with PV, 745 MW have been canceled or “delayed to the point that project validity is questionable,” and 3,400 MW of projects are still in the pipeline.
“Solar PV is not only more attractively priced at the moment than CSP technology, but it also has an established track record that makes it more appealing to investors,” says senior analyst Peter Asmus.
“Yet, CSP may overcome these disadvantages by reducing costs as a result of larger scale and new technology models. The most promising opportunity in the near term is to link CSP with thermal energy storage, thereby increasing the value of clean electricity in a cost-effective way that solar PV cannot replicate.”
The report also finds that changes within the industry will help CSP to compete. An increase in hybrid power plants, combining CSP technology and fossil fuels, as well as utility-scale energy storage capabilities will help to prop up CSP revenue.
Global market growth, according to Pike Research, depends on “project bankability/financing, policy, cost reductions in technology, cost competitiveness with PV, and expanded transmission capabilities driving exports to other regions.”