According to IHS analysts, cumulative global installed photovoltaic (PV) installations will surpass 310 GW by the end of 2016, compared to 40 GW at the end of 2010.

China, U.S., and Japan to lead PV growth in 2016. Image source: IHSChina, the U.S., Japan, Germany and Italy will account for 70% of this capacity. However, Germany will fall from the second-largest installed base for PV to the fourth-largest as annual installations stall. The country will be surpassed by the U.S. and Japan.

“A continued stagnation of major European PV markets due to weaker financial incentives has caused PV additions in Europe to slow dramatically in recent years, but global demand remains strong,” says Josefin Berg, senior analyst of solar demand for IHS Technology. “The supply chain continues to benefit from a period of relatively stable pricing, and there could be a new wave of capacity expansions.”

During the closing months of 2015, the global PV industry enjoyed strong growth. And although some regional markets present challenges to local suppliers, the current outlook for the global industry in 2016 remains positive. After growing 35% in 2015, global PV installations are forecast to grow an additional 17% in 2016, culminating in 21 GW of PV to be installed worldwide in the fourth quarter.

Global PV installed capacity is expected to increase by 69 GW throughout 2016, compared to 59 GW of annual installations in 2015. The U.S., India and China will grow by 5.6 GW, 2.7 GW and 0.9 GW, respectively. Altogether they account for 9.3 GW of the 10 GW increase.

Continued strong solar PV demand will also support stable module pricing. Average PV module prices are expected to fall less than 5% in 2016, which is the smallest year-over-year decline recorded by IHS. Generally, 2015 was a positive year for the PV module manufacturing industry, with industry average gross margins reaching 22%. Largely due to declines in polysilicon prices and strong pricing in some markets, total gross profit from modules reached $8.5 billion in 2015, the highest level since 2011.