Taiwan’s PV market is about to encounter its first recession at the end of 2020, with new installations forecast to decrease to 1.2 GW—a 15% drop from 1.4 GW in 2019. So far, the cumulative installed PV capacity in Taiwan stands at 5 GW, short of the target of 6.5 GW set for 2020 by the Bureau of Energy of the Ministry of Economic Affairs. The deadline for this target has been extended to the second quarter of 2021, but the market appears not likely to hit the target.
Sharon Chen, senior analyst at InfoLink, expects new solar capacity additions to grow to 1.5–1.7 GW in 2021. To hit the target, solar developers need to pull off an installation boom next year. Although the Taiwanese government is promoting PV policy, the construction timelines for ground-mounted projects are normally extended, taking into account the time needed to change the use of the land designated for construction and develop a plan for soil and water conservation. Therefore, PV development will slow down next year with less increase in new capacity additions.
The Taiwanese PV market will focus on two developments: fishery-solar hybrid power station and major electricity consumers. This means that the market will move toward a state where feed-in tariff scheme and green energy certification scheme exist at the same time—no other countries have done likewise.
High barriers for fishery-solar hybrid projects
The Taiwanese government has been actively advocating hybrid fish/PV scheme recently in the hope to optimize land use and generate clean energy all at once. Three regions including Kaohsiung, Tainan, and Chiayi have been designated for developing fishery-solar hybrid plants. While there are 4 GW of capacity to be deployed, projects that can be materialized in 2021 are mostly small and medium in size, with most of them smaller than 2 MW.
Hybrid projects that are beyond 50 MW are undertaken by big EPC contractors or investors in a collaborative way. Medium and large-sized projects, in particular, entail much more preparations because they call for evaluating the farming techniques and estimating the haul size, and allow for only 40% of the area of a fishpond to be furnished with a solar panel. Moreover, these projects are not going to be grid-connected until 2022 or even 2023. What makes it particularly tricky for solar developers to build a large hybrid project is not less about calculating how much area of a fishpond should be covered with a solar panel, than about producing and selling fish goods in an organized way.
Get ready for “major electricity consumer” clause
To catch up with the global trend to go green, many top-ranked businesses in Taiwan are in the midst of adopting renewable energy. Yet, limited roof load capacity of factories makes it necessary to find space for installing solar systems, unless it’s a newly built facility that is designed to be equipped with solar panels. But land that allows for solar installations is perennially scarce in Taiwan.
The “major electricity consumer” clause, which targets users with a contract capacity of more than 5,000 kW and will take effect in 2021, stipulates that a renewable project be completed within five years. This clause also offers an “early-bird” incentive designed to speed up project development, so it can be complemented with supportive measures. With the renewable market flourishing and the clause due to be implemented, Taiwan will see healthier corporate demand for renewable installations next year.
Analyst Chen points out that because the government has identified eight priority areas for solar installations, with 3.4 GW of potential capacity for rooftop PV and 5.2 GW for ground-mounted PV. The local PV market may grow exponentially after 2022 if all these projects come to fruition.