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China, Indonesia, India drive floating solar demand
Developers battle limited land availability and increasing land costs for ground-mounted solar projects
Tom King 29 May 2023

Annual floating solar capacity additions are expected to pass the six-gigawatt threshold by 2031, as photovoltaic developers struggle to meet growing solar demand and look at alternative development technologies.

The floating solar (FPV) market will expand at a compound annual growth rate (CAGR) of 15% in the next 10 years, according to an analysis by global research and consultancy group Wood Mackenzie. At least 15 countries will exceed 500 megawatts of cumulative FPV installations by 2031, with Indonesia, India and China making up almost 70% of the total FPV demand in 2022.

Speaking at the recent SNEC PV Power Expo in Shanghai, Ting Yu, consultant at Wood Mackenzie, said: “The global solar industry, including PV developers, continue to battle limited land availability and increasing land costs for ground-mount solar projects, which is driving demand for floating installations.

“Despite development costs of FPVs ranging 20% to 50% higher than comparable ground-mount projects, increased competitiveness in the developer and EPC (engineering, procurement and construction) landscape is helping to drive down costs in the sector.”

The Asia-Pacific market had approximately 3GW of floating solar projects in 2022, capturing over 90% of the FPV demand that year. Countries such as China, Indonesia, India, South Korea, and Thailand are all currently developing multiple floating solar projects, Wood Mackenzie says.

In China, the floating solar project pipeline is predicted to grow at a steady pace, with the cumulative FPV capacity to cross 13GW by 2031 at a 12% CAGR over the next 10 years. “China will continue to lead in floating solar installations. The country has been able to utilize flooded coal mines that have been decommissioned to develop floating solar,” says Yu.

Netherlands to lead Europe

With almost 150MW, Europe is the second largest region for FPV demand, with the Netherlands in the lead followed by France. More countries are adopting the technology as multiple land use is being enforced in regions across Europe.

The Netherlands has the largest FPV project outside Asia-Pacific, representing 32% of Europe’s FPV market in 2022, helped by the Sellingen floating solar park (41.4MW) that came online in 2021. This reflects how project sizes are continually growing in Europe’s leading market.

“Although it is still a small market in Europe, the trend is positive, and bigger floating PV plants are expected in the near future. After 2025, slow growth is projected as the main spots would have already been developed at this point. In addition, grid constraints and higher LCOE (levelized cost of energy) for bigger plants means the technology is not competitive against rooftop PV,” Yu adds.

In the US, floating solar is expected to grow at a CAGR of roughly 13% over the next 10 years, where development is being driven in states with high demand for solar but expensive land costs, including California, Florida, and New Jersey.

“Overall, the floating solar industry has seen high costs across all market segments, due to component costs and other soft cost increases, as a result of supply chain constraints in 2022,” Yu says. “For instance, the rise in price for high-density polyethylene (from the pandemic) was the main driver of high SBOS (structural balance of system) costs for FPVs. Although the cost is expected to be lower as the supply chain expands,” Yu concludes.

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