Southeast Asia Solar Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Southeast Asia solar energy market is expected to grow at a CAGR of around 2.5% during the forecast period. With the COVID-19 outbreak in Q1 of 2020, the Southeast Asia solar energy market didn’t witness any negative impact. In 2020, all the countries present in the region had increased their installed capacity. Though there was an impact on the supply chain during H1 of 2020, however, the sector in the region managed to grow in 2020. Factors such as the declining price of solar PV modules and installation are expected to drive the market. However, increasing adoption of alternate renewable technology like hydropower is expected to hinder the market growth during the study period.

- On account of dominating market share in 2020, solar photovoltaic is expected to act as a significant segment during the forecast period.

- With a target of reducing carbon emission by 15% of 1990 level by 2030, the region is expected to increase the opportunity for solar energy companies to install solar PV plants in the region during the upcoming years. Moreover, the region has plans to reduce dependency upon foreign fossil fuel like crude oil and would opt for renewable energy like solar to reduce region expenses related to imported oil.

- With a significant installed capacity in 2020, Vietnam is expected to dominate the market during the study period.

Key Market Trends

Solar Photovoltaic Expected to Dominate the Market

- Southeast Asia is becoming one of the fastest-growing solar energy markets and one of the most promising regions in the global expansion of the solar photovoltaic industry.

- In 2020, Vietnam and Malaysia were at the forefront of this movement, with the highest amount of new PV capacity installed in the region. A total of around 12.2 GW of solar PV projects was installed in the countries during 2020.

- The increasing demand for electricity, the abundance of the solar resource in the region, and the favorable renewable-related policies are some of the factors that have been favoring the growth of the solar power industry in the region.

- In addition, policymakers across different countries in the region have been intensifying their efforts to ensure a secure, affordable, and sustainable pathway for the energy sector, which includes activities to facilitate investment in solar power generation and infrastructure.

- In January 2020, Asian Development Bank (ADB) inked a USD 37.8 million deal to support the development and construction of a 50 MW solar photovoltaic (PV) park in Vietnam.

- Further, in January 2020, the energy commission of Malaysia (Suruhanjaya Tenaga) awarded nearly 491 MW (490.88 MW) of large-scale solar PV projects to five companies (Cypark Resources Berhad and Impian Bumiria, JKH Renewables and Solarpack Asia, ib Vogt GmbH and Coara Solar, ENGIE Energie Services and TTL Energy, and Konsortium Beseri Jaya, and Hanwha Energy Corporation Singapore). The commercial operation of these projects is expected to start in 2021.

- Hence, considering all the factors and the upcoming projects, solar PV is expected to act as a significant segment during the study period.

Vietnam to Dominate the Market

- The energy demand in Vietnam is projected to increase by more than 10% annually in the next five years and required power capacity to double, the Vietnamese government is moving quickly to diversify its energy mix, including plans to generate more power from renewable sources.

- Based on its favorable geographical conditions, Vietnam has a high potential for solar energy production, with 1,600-2,700 sunlight hours per year and an average direct normal irradiance of 4-5 kWh per sqm per day. The country also has a well-developed grid infrastructure, government incentives, and a standardized power purchase agreement (PPA) for solar power projects.

- In 2020, the total installed solar photovoltaic (PV) capacity in Vietnam reached 16.5 GW, representing an increase of 237% over the previous year’s value. This huge rush in the Vietnamese solar PV market can be attributed to the attractive feed-in-tariff (FIT) rates introduced in 2017 and a few large-scale solar projects that were commissioned in 2020.

- Further, the country has a few under-constructions solar energy projects like the Gia Lai photovoltaic project (500 MW), and the Xuan Thien Ea Sup project (2.8 GW). Therefore, commissioning of these projects is likely to boost the sector in Vietnam during the study period.

Competitive Landscape

The Southeast Asia solar energy market is moderately fragmented. The key players in the market include Canadian Solar Inc., JinkoSolar Holding Co. Ltd, Trina Solar Limited, Thai Solar Energy Public Company Limited, and Scatec ASA among others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support