Mercom Capital Group, llc, a global clean energy consulting firm, reiterated its global photovoltaic (PV) installation forecast of approximately 38 GW for 2013, a 23% growth year-over-year, noting improving market conditions.

"After years of overcapacity, bankruptcies and record low prices, we are now seeing price stabilization, higher utilization rates and a move toward supply-demand equilibrium. Market conditions for solar look much better than they did just three months ago," said Raj Prabhu, co-founder and CEO of Mercom Capital Group.

The report said one of the big overhangs, the China-EU trade case, which could have otherwise set off an all-out trade war, has been settled. Although trade skirmishes will likely continue, this settlement is a relief and brings some sorely needed certainty to the markets.

Mercom said China and Japan are installing at a rapid pace and making all the right policy moves giving the market confidence that they are ready to take over as the top solar markets for the foreseeable future.

Mercom's analysis noted that there are a lot of positive developments coming out of China that are good for the solar industry in general. China's push towards stronger domestic demand is primarily driven by the necessity to help domestic manufacturing and address air pollution problems.

In a move to diversify its energy generation sources after the Fukushima disaster, Japan announced policies to aggressively promote renewable energy and now has one of the most generous solar tariffs in the world. There are reports of strong installations in April and May. Over 19,000 MW of non-residential PV project applications have been approved under its FiT scheme as of the end of May. However, there are some signs of problems arising from the rush and new project approvals have slowed considerably since March. Though the obvious reason for the drop seems to be the rush before the FiT cut, grid connection issues are also becoming more apparent with utilities reportedly rejecting projects based on grid stability and connection issues,'' Mercom said.

With a 2013 forecast of 8.5 GW and 7 GW respectively, China and Japan are on pace to be the top installers this year. PV installations in the United States continue to grow and are forecasted to reach approximately 4.5 GW in 2013. Other major markets forecasted in 2013 are Germany at 4 GW, Italy at 2 GW, UK at 1.5 GW and India at 1 GW.