BNEF forecasts weaker than expected US solar market; Japanese market soars

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A new Bloomberg New Energy Finance (BNEF) report has significantly raised its PV installation forecast for Japan in 2013, yet points to the US market being weaker than expected.

Previously, BNEF said that it expected PV installations in Japan to reach between 3.2-4GW in 2013. However, that forecast has been radically upgraded to between 6.1GW and 9.4GW.

The significant revision to the forecast was said to be due to the large number of utility-scale PV projects that have recently been announced and the rapid increase in module shipments in the fourth quarter of 2012, as reported recently by the Japan Photovoltaic Energy Association.

The Asia Pacific region in general has been the bright spot of growth for the PV industry in 2012 and is expected to continue that momentum this year, according to a recent NPD Solarbuzz report.

However, BNEF is less optimistic about growth of the PV market in the US this year. According to the report, the US is forecast to install between 3.3GW and 3.9GW in 2013.

According to recent figures revealed by the SEIA and GTM, the US installed 3,313MW of PV in 2012. PV project pipelines already revealed by leading US project developers such as First Solar, SunEdison and SunPower would alone account for half of that expected installation figure.

Estimates do vary for growth in the US but the BNEF figure is much lower than the average of forecasts. Indeed, estimates in the range of 5GW of new PV capacity being added in the US in 2013 have been forecasted.

The Bloomberg analysis covering the revised forecast did not explain why market growth in the US was expected to be so weak this year, after several years of almost doubling year-on-year.

According to PV Tech’s own ongoing coverage and data collection of PV projects around the world, yet to be finalised first quarter 2013 PV project activity indicates nearly 5GW of activity in the US. The figures are not specific to project installations but provide primarily insight into project activity such as completions, and planned installations through 2013 – 2014 and beyond that PV Tech has covered in news and project focus articles through the period covered.

In contrast, PV project activity in Japan continued to be lumpy in the first quarter of 2013 and totalled around 500MW. However, reports in April of a massive project on a Japanese Island almost doubled the cumulative activity levels for the year.

BNEF’s increased installation forecast for Japan also raises issues over the supply chain being able to handle such significant growth within a year. Despite Japanese module manufacturers having decent production capacity levels that exceed 3GW, other major module manufacturers would be gaining significant market share in Japan to meet demand.

According to previous analysis by NPD Solarbuzz, PV installations in Japan in 2011 reached just over 1.2GW, however this generated nearly 250MW of imported modules.

US-based SunPower recently announced a renewed partnership with Toshiba to supply over 100MW of modules for projects in Japan this year. Chinese producers such as JA Solar have also highlighted shipment growth to Japan and historically, Suntech Power Holdings had been a key supplier in the country. Yet JA Solar highlighted that it expected shipments to increase 50% to the US, underplaying the role Japan will have on its shipment levels in 2013. 

Although recent 2013 shipment guidance from many tier 1 module manufacturers indicated a return to full-capacity utilisation in the second half of the year to meet increased demand, notably from China, Japan and Asia Pacific, few singled out Japan as the major growth market for shipments in 2013.

However, new emerging markets such as Japan are often characterised by underperformance in the first year of feed-in tariffs being established and outperforming in subsequent years until government intervention to slow growth.

New forecast figures for Japan from NPD Solarbuzz are expected to be released in the next few weeks.

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