Trends and outlook in solar asset management for 2018 and beyond

Solar energy plays a significant role in the transition to a cleaner energy system as the industry experiences high growth and becomes more price competitive. A report published by EnergyTrend anticipates global solar additions to reach a record 100GW in 2017, with 48GW demand from China, 12.5GW from USA, 10GW from India, and 6.8GW from Japan.

Moving forward, a GTM report expects the global installed base to reach 863GW by the end of 2022. Asia Pacific comprises the majority of the market, capturing 445.25GW by 2022, followed by Europe at 166.86GW, North America 138.62GW, Middle East-Africa 63.22GW, and Latin America 49.12GW. Most growth will originate from Asia Pacific, with an expected additional capacity of 300GW between the end of 2016 and 2022, followed by North America with an additional 94GW, Europe 64GW, Middle East-Africa 53.76GW, and Latin America 45GW.

GTM identified a number of global trends in the solar market. In the future, we can expect:

Larger portfolios 
New construction markets will feature large plant sizes and portfolios will undergo consolidation. Asset management software are tools to help asset managers administer their larger portfolios efficiently. See how asset manager’s favourite software HAP® can assist with portfolio management.

Geographical diversification
Portfolios will undergo geographical diversification. Although large U.S. and Indian investors continue to focus on their domestic markets, many countries seek diversification to capture opportunities for portfolio growth and to reduce dependency on a single incentive regime.

Insourcing and outsourcing asset management
Investors holding larger portfolios (hundreds of megawatts and beyond) benefit from economies of scale, hence they insource asset management. On the other hand, smaller investors experiencing portfolio growth will benefit from third-party asset management as they approach the limit of existing processes and turn to third-party asset managers to scale their portfolios.

Price pressure on asset management services
Asset management services are expected to become cheaper as the solar industry becomes more price competitive. Nevertheless, asset management is growing more complex as regulatory environment becomes more complex and as investors diversify their portfolios.

New entrants in the third-party asset management landscape
More project developers or investment management firms may offer third-party asset management services to capture recurring revenue and benefit from economies of scale.

Energy trading
More countries are expected to sell solar power on energy exchange market, and energy traders who assist this process will play an increasingly significant role in the market.

Third-party asset management landscape consolidation
Asset managers must aggregate smaller portfolios to remain price-competitive. Asset managers will manage more geographically diverse portfolios as investors enter various markets while providing a consolidated view of assets across countries.

The solar market expects significant growth and dynamics in the future. As the market continues to grow, asset managers will face more challenges such as price pressure and difficulty managing larger, more diverse, and more complex portfolio.There is smart software designed to help asset managers address these challenges and help them save time and reduce soft costs.  Contact us to learn more about Arbox Hap®.