Forecasting the Global Photovoltaic Market by Using the GM(1,1) Grey Forecasting Method

The solar photovoltaic (PV) technology is the fastest emerging energy technology during the past decade. Precise predictions of the PV market are essential for the governments' energy policy definitions, firms' expansion of their production of PV related equipment as well as investors' decisions regarding to investments in PV related firms. However, an accurate prediction of the PV market is not easy. Since the solar market growth was much slower, predictions of the solar market based on the historical market data from the past decades can be misleading. Further, factors including the oil price, the emergence of other alternative energies, the demand and supply situation of the semiconductor market, etc. can influence the solar market. A suitable solar market prediction method for such a case being characterized by poor information will be very helpful. Due to the nature of the Grey theory for dealing with systems being characterized by poor information or for which information is lacking, the authors developed a GM (1,1) Grey system based forecast mechanism for the global solar market forecast. The empirical study based on a forecast of the year 2002 to 2009 global solar market with the around 5% forecast error has demonstrated the effectiveness of the forecast mechanism. In the future, the GM(1,1) based forecast mechanism can further be applied to the solar and other emerging alternative energy markets.