Solar in Southeast Asia is set for a rebound, after a two-year market contraction triggered by Vietnam’s abrupt suspension of its feed-in-tariff policy in 2020, the Asian Photovoltaic Industry Association (APVIA) and the Global Solar Council (GSC) indicate in a new report, published in work with SolarPower Europe.
Annual capacity additions are expected to hit 3.8 GW in 2023, up 13% from 2022. In 2021, the market contracted by 68% to 4.2 GW of annual additions. But now, favorable policy frameworks, shrinking technology costs, and increasing electricity demand now point to growth opportunities in Southeast Asia.
“New capacity is well distributed across different countries and the regional market no longer depends on one single contributor, (i.e. Vietnam),” said the APVIA and the GSC.
However, uncertainty remains, as some countries are now at a turning point in their solar stories. The report said it remains to be seen just how quickly they can deploy solar. The region also faces challenges related to grid infrastructure, access to financing, land availability, and lack of a skilled workforce. According to the report’s “high” scenario, regional installations could reach 5.7 GW this year, or decline to 2.5 GW under a “low” scenario.
“Starting from 2024, a high pace of growth is expected across the region,” the APVIA and the GSC said. Annual installations are forecasted to grow 32% to reach 5.1 GW in 2024, 59% to 8.1 GW in 2025, 28% to 10.4 GW in 2026, finally hitting 13.3 GW of new additions in 2027, according to the report.
Top five markets in Southeast Asia are Vietnam, Thailand, Malaysia, Philippines, and Indonesia.
