Solarbuzz’s new European PV Markets Quarterly predicts that 2011’s fourth quarter will see a quarter-over-quarter rise of 22% in the EU PV market, but 2012 will still be a tough year to navigate. Solarbuzz noted that downstream companies would need to be able to manage a new pricing environment in the midst of flailing incentives and grid parity economics.
While quarter-over-quarter results are anticipated to be up 22%, year-over-year growth, per the report, is expected to drop 25% due to a combination of solar incentive cuts, feeble project financing and module price’s dropping so much that, according to Solarbuzz, companies will need to get rid of their inventories or be faced with substantial write-downs.
The report found that ground-mounted solar installations took over one-third of the EU market in the second half of 2011 despite falling 27%, while non-residential building-mounted installations will take a 55% share in 2011. Solarbuzz advised that European markets are feeling the effects of narrowing PV incentive policies, bank lending restrictions, policy changes and utility concerns due to electricity grid stability.
“Falling prices have compensated for major cuts in government solar incentives to leave PV investment returns still sufficiently attractive in almost all markets. However, the more important consequence of frequently changing incentive policies across Europe has been greater uncertainty and therefore higher risk for project financiers. This has come at the worst time for banks also suffering under macro-economic and currency crises,” noted Alan Turner, VP of Solarbuzz Europe.
Solarbuzz acknowledged that 2012’s first quarter, expected to be down 72% quarter-over-quarter, would see the ground-mounted sector hit the hardest and falling 81%. Residential lease is predicted to decrease by 41% while the German market as a whole is likely to plunge by 11% year-over-year. The report additionally concluded that installed system prices are calculated to wane by an average of 17% throughout 2012.
The EU report found that Austria, Belgium, Bulgaria, Greece, Romania, Spain, Ukraine and the UK are set to offer the most stable volumes or growth over the next one to five years in the smaller market segment.