Italy could alter its subsidy cuts deadline from July 1 to October 1, reports Deutsche Bank. At a technical meeting of state regions conference last week, former undersecretary of industrial activity, Stefano Saglia, announced the current Conto Energia 4 would remain in place until the €7 billion limit were reached if this change was to occur.
Analysts at Deutsche Bank state, “Our checks indicate a sizeable amount of developed/permitted projects could be constructed if subsidy cuts were pushed out until October. IRRs for the sub 1MW rooftop markets are already very attractive and additional module price declines could stimulate the market further. We estimate additional 1.5-2GW of demand could be created in the three-month period if subsidy cuts are pushed out.”
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The overall European outlook remains murky, according to Deutsche Bank. Although the Q3 Italian demand would improve global quarterly demand somewhat, it would slow demand in other sectors. The Deutsche Bank group is predicting increased supply from polysilicon and tier 2 module suppliers and an eventual reduction in demand from unsustainable markets such as Italy and Germany. The next few weeks could see rushed orders from major markets in Europe coming to an end, as installers remain cautious about 2H demand.
Chinese suppliers on the other hand are running at high utilization rates, which Deutsche Bank believe could result in some inventory restocking across the European warehouses in the next one to two months. “But a potential reduction in European demand along with increased poly supply means another leg down in poly pricing looks likely in 2H.”