The expectation that PV installations would reach 32GW in 2012 has been dampened by a new report from NPD Solarbuzz.

According to the market research firm, PV demand in 2012 reached 29GW, up only 5% from 27.7 GW in 2011. Notably, the growth figure is the lowest and the first time in a decade that year-over-year market growth was below 10%.

“During most of 2012, and also at the start of 2013, many in the PV industry were hoping that final PV demand figures for 2012 would exceed the 30GW level,” explained Michael Barker, Senior Analyst at NPD Solarbuzz.

“Estimates during 2012 often exceeded 35GW as PV companies looked for positive signs that the supply/demand imbalance was being corrected and profit levels would be restored quickly. Ultimately, PV demand during 2012 fell well short of the 30GW mark.”

 

Overcapacity

According to the upcoming NPD Solarbuzz Marketbuzz report, PV supply remains 50% higher than demand in 2012, despite another annual record level of growth. The 29.0GW of demand added during 2012 was said to be nearly 30% of all installed PV capacity at the end of 2012. NPD Solarbuss said that the demand level of 29.0GW in 2012 should be compared directly to the level of supply that upstream manufacturers were expecting during the year.

“For supply and demand to have been balanced during 2012, end-market demand should have approached the 45 GW level,” added Barker. “This is 50% higher than actual PV demand in 2012, and reflects the lack of demand elasticity that characterizes the PV industry today. It also explains why even those companies that gained market-share in 2012 still ended up reporting significant operating losses.”

Regional shift

 

Emerging markets didn’t provide the boost the industry was expecting in 2012, though neither did the major market of Europe completely evaporate.

NPD Solarbuzz said that European demand was 16.48GW, almost 60% of global demand in 2012.

Asia proved to be the second strongest market, generating 8.69GW of demand, notably much coming from China in the second half of 2012.

NPD Solarbuzz now segregates PV demand from the Americas into North America (US and Canada), and the Latin America and Caribbean regions. The Americas provided 3.68GW of demand, or 13% of global demand in 2012. Yet it should be noted that California provided more than one-third of all PV demand from the entire Americas region during 2012.

“The role of emerging regions will be pivotal to PV industry supply and demand during 2013 and will offer a leading indicator for how quickly the industry can exceed the 30GW annual run-rate level,” concluded Barker.

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