The Solar Mystery Market of 2011 Is...?

Second-Tier Second-Tier Markets:

If South Africa is a major second-tier market due to its large-scale project focus, there are several second-tier markets among the most attractive in 2011 simply as a function of projected growth rates and favorable tariff schemes.

Cyprus, the U.K. and Israel all make the cut, as does Malaysia, where several of the biggest module and cell makers have manufacturing operations, including First Solar.

No single of the second-tier markets will come close to making up a difference measured in the multi-gigawatts from a projected European market shortfall.

Cypress, for example, is a great market, in the estimation of Lux Research, with a valuable subsidy program and a geographic location that makes it closer to grid parity than many core European markets. However, it's a small market with a cumulative opportunity measured in the hundreds of megawatts through 2020 (see chart above).

India has to be included as well, and can certainly grow much larger than a market like Cyprus with the government itself looking for double-digit gigawatt growth, but the India market opportunity has been hyped considerably, and at least so far, has been as notable for the hiccups in financing and the limits posed by domestic content requirements as by the rhetoric of an explosive solar market of the future.

Even with the stumbles along India's path to solar greatness, the solar heavyweights are getting their foot in the door. Trina Solar just announced the completion of a 5 megawatt solar park in the Indian state of Gujarat.

The state of Gujarat, meanwhile, recently announced plans to invest $2.3 billion in the development of a 500MW solar power plant complex, with subsidies to developers in the form of water, electricity, roads and power transmission services.

First Solar also recently announced its first deal in India, planning to ship 15MW next year for a project in Gujarat.

"India is the exception, it has huge potential. India is both next year and long-term," Eckstein said.

What India and Cyprus, and the rest of the second-tier solar markets have in common is long-term potential, as opposed to 2011 demand stop-gaps.

Among second-tier markets in 2011 that are actually among the historical developed solar markets is Japan. "Japan is a good case of a reintroduced subsidy and demand occurring again, not as a boom, but a bit more gradually," Lux Research's Sullivan said.

IHS Emerging Energy Research thinks that North America will be the fastest growing market in 2011, and the U.S. and Canada will be No. 1 and No. 2 in growth rate outside of Europe. At No. 3, IHS Emerging Energy Research analyst Cassidy Deline said there is no single consensus choice, but Japan might just end up among the triumvirate of top three growth markets next year.