PV module shipments have declined for the first time in two years, according to the latest figures released by IMS Research. The quarter-to-quarter shipment figure fell by nearly 10%, a drop attributed to the uncertainty surrounding the announcement of Italy's new feed-in tariff (FiT).
Average prices, which had remained strong throughout 2010 thanks to high demand from major European markets, also fell sharply in Q1. This is a decline that is forecast to continue into Q2, with the prices of crystalline modules from Chinese Tier-2 suppliers falling the most dramatically.
IMS analysts claim that the announcement of a revamp to Italy’s FiT saw demand on the peninsula come to a virtual standstill overnight, leading to high inventory levels and crashing end-market prices. “Suppliers that are dependent on the Italian market saw demand for their products quickly evaporate when the feed-in tariff was suspended,” IMS’s Sam Wilkinson said. “Many manufacturers rapidly adjusted production in an attempt to prevent stock from building. However, distributors were already stocking large amounts of product and the total worldwide PV module inventory has now reached a record amount of over 10GW in Q2 2011. Many companies have already begun dumping prices in order to clear it”.
Last Thursday, the Italian government finally unveiled the country’s new solar subsidy scheme, which is likely to revitalise the industry’s flagging fortunes by slowing down the rapid decrease in prices. However, IMS believes that the long-term damage to investor confidence inflicted by the Government’s indecision will prevent the Italian market from recovering to its 2010 size again before the end of the year.
Despite its pessimistic outlook on Italy, IMS is forecasting positive growth for the global PV module market in 2011; full-year shipments are predicted to grow by nearly 20% thanks to continued demand from new GW-scale markets, such as the USA, and continued demand from European countries.