South Africa tops Emerging PV Markets Attractiveness Index

South Africa has been ranked as the world’s most attractive emerging market for solar photovoltaic (PV) energy, according to analysis by IHS Technology.

Scoring 66 out of 100 in the IHS Emerging PV Markets Attractiveness Index for Q4 2013, South Africa came in a full 17 points ahead of second-ranked Thailand.

The index ranks the attractiveness of PV markets in emerging countries to investors, developers and manufacturers in four key areas:

• Macroeconomic climate
• Potential market size
• Project profitability
• Pipeline maturity

Among the top five countries in the index, South Africa ranked highest in potential market size, project profitability and pipeline maturity.

“South Africa has consolidated its position as a growth market for PV by cultivating a policy environment stable enough to attract financing from commercial banks,” said Josefin Berg, senior PV analyst at IHS.

According to Berg, Thailand’s position as the second-most attractive emerging market for PV reflects investors’ enthusiasm for the country’s adder scheme, under which the government paid feed-in premiums to solar-power producers. But as that program has now been discontinued, replaced with a rooftop feed-in tariff, Thailand is potentially in jeopardy of becoming less attractive to PV investors, Berg said.

Turkey rounds out the top three emerging markets, the result of conditions conducive to the development of PV including soaring power demand and prices, relatively low country risk and established PV incentives. An obstacle to Turkey’s growth, however, is the relative immaturity of its PV pipeline - with projects larger than 1 MW currently at a standstill awaiting the tender of 600 MW of licences.

While IHS sees the potential for the installation of 1 GW of PV capacity in Turkey by 2017, it forecasts a build-out of only 150 MW this year in the country.

“Permitting and grid connection contracts remain the main bottleneck in 2014,” Berg said.