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A sobering reality-check has been dished-out by market research firm, NPD Solarbuzz as it has revised down its 2012 forecast for the PV sector. Global PV installations in the second-half of the year are expected to reach 16GW, an increase of 25% compared to the first-half of the year when installations reached 13GW. Only a late surge in shipments and installations in China and India, as well as a strong recovery across European markets would support a 30GW-plus market this year.
Michael Barker, Analyst at NPD Solarbuzz, said, “The increasing globalization of PV demand continues to soften quarterly demand swings. This will soon allow production and shipment forecasts to be planned with increased certainty. However, in the short-term, margins continue to be under pressure until the market rationalizes at an appropriate supply/demand balance.”
The market research firm noted PV module inventory levels increased in the third-quarter of 2012, from 66 to 79 days outstanding, while shipments decreased by 7%, quarter-on-quarter, a results of higher production output in anticipation of a stronger second-half demand cycle, typical of the past few years.
“Although Q4’12 will provide a significant boost in end-market demand, it is unlikely to match the record levels seen during 2011 when year-end demand resulted in over 10 GW of PV modules being consumed in a single quarter,” added Barker.
NPD Solarbuzz is forecasting that fourth quarter demand is expected to be in the range of 8.5GW-9.5GW, below previous forecasts and contributing to the market not reaching 30GW in 2012. However, due to delays in projects in countries such as China and India, the market research firm reserved a potential 25% upside to this forecast.
However, despite a lower rate of growth compared with the 27GW reached in 2011, NPD Solarbuzz highlighted some potential positives for the industry in 2013.
They believe there are signs emerging that next year will lead to greater consolidation as lower-tier PV manufacturers finally capitulate and exit the market, enabling leading PV manufacturers to absorb gains in market share that will support lower ASP declines and improved margins.
Instead of European and US-based manufacturers exiting the market as has been seen over the last 2-years, ‘underperforming’ Chinese tier 2 and 3 manufacturers will be the victims in 2013, according to the market research firm.
“Module supply restructuring will bring much needed stability to the PV industry in 2013, including reduced pressure on ASP declines, breathing space for manufacturers to focus on cost reduction, and gross margin recovery,” added Barker. “With reduced competition in the market, leading module providers will be afforded greater access to downstream sales channels, allowing them to align production and shipment forecasts.”