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Despite a softening German market, PV installations globally are set to hit a record 23.8GW in 2011, an increase of 34% over 2010 figures. A changing of the guard will also take place with Italy overtaking Germany in PV installations for the first time, according to new data from market research firm IHS.
“Propelled by residential and institutional investors who support green initiatives as well as sustainable funding, Germany has been the world’s leading country for PV installations since 2009,” said Dr. Henning Wicht, senior director and principal analyst for photovoltaics at IHS. “However, installations in the country stalled in the first half of 2011. And while the market recovered in the second half, the increase was insufficient to generate growth for the whole year. Meanwhile, the Italian government’s attractive incentives boosted the country’s installations massively, giving it the top position worldwide.”
The market research firm noted that installations in Germany are expected to decline by 20% to 5.9GW in 2011, down from 7.4GW installed in 2010. Italy will become the leading installer in 2011 with an estimated 6.9GW worth of PV systems installed, nearly double the 3.6GW from 2010.
Growth in installation in major emerging markets included the US, China and Japan, though the French and UK markets also produced strong installations figures.
According to IHS, the US is expected to install 2.7GW in 2011, much higher than other forecasters, which have placed expected installations in the region of 1.7-2.0GW, placing it the third largest market in 2011.
In fourth place is China with expected installations reaching 1.7GW and Japan emerging once again with 1.3GW installed. In sixth position, according to IHS is France, estimated to have installed 1GW in 2011.
The market research firm continues to believe Europe will remain a challenging environment in 2012. PV system prices are expected to decline to €0.65 in March 2012, compared to prices being offered in the third quarter of 2011 when large PV systems were offered in Germany at €1.60 per watt.
According to the market research firm, further declines in the price of polysilicon are expected. IHS noted that polysilicon has dropped below US$30 per kilogram as of early November, 2011 and spot prices of US$20 are possible by the March/April, 2012 time frame - given the continuing decline in demand.
As lower material costs make their way through to module production, cheaper modules will be produced. However, the intense competition in the market and the current oversupply will result in gross profit margins from wafer to module production in the single-digit range.