Fourth quarter PV install forecasts turning into a lottery

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Two of the major PV market research firms have two contrasting forecasts on global PV installations in the fourth quarter of 2014. 

Recently, NPD Solarbuzz projected global fourth quarter installations to reach over 19.5GW, while IHS has just forecasted 14.4GW, down from a previous projection of 15GW. 

Although both forecasts picture significant (record) PV activity squeezed into a 3 month period the knock-on is that full-year global installation forecasts from both firms remain as far apart as they did at the beginning of the year. 

IHS has actually lowered its last 2014 projection from around 47GW to currently 45.4GW. Weaker than expected installations in Europe, notably Germany and Italy were to blame. 

According to IHS Germany is only expected to install 2.1GW in 2014, down from 3.3GW in the previous year. Italy is expected to drop to 0.8GW of PV installs in 2014, down from 1.7GW in 2013.

In contrast, NPD Solarbuzz remains highly bullish, projecting that the 19.5GW plus of projected installs in the fourth quarter would result in full-year global installs reaching around 50GW or more. 

One thing that both firms can agree on is that China is not only expected to be the largest market again in 2014 but the goal of reaching 13GW of installs, as decreed by the Chinese government remains on track. 

However, IHS like BNEF had previously misread China’s ability to meet government targets, discounting heavily on the 10GW goal set in 2013. A year later and both firms are toeing the line. 

NPD Solarbuzz has a slightly more bullish take on China installs, projecting as much as 13.7GW could be installed in the country by year end. Solarbuzz said fourth quarter installations were expected to hit 7GW, double the previous quarter.

Yet, IHS is only saying that China will be installing “more than 5GW” in the fourth quarter, while recently suggesting that with only 3.7GW under construction at the end of August, at least another 6GW is needed to be installed before the end of the year to meet China’s 13GW target, based on IHS projections.

There is also a big discrepancy between IHS and NPD Solarbuzz on figures for the UK. IHS is significantly more bullish than its rival, forecasting the UK could become the fourth largest global market with 3.0 to 3.2 GW of new installations in 2014. 

In contrast, NPD Solarbuzz has become increasingly downbeat on UK prospects and does not expect new installs to exceed 2.5GW by the end of the year. 

The bullish stance taken by IHS on UK is based on the premise that project developers would rush to complete projects in 2014 to avoid possible bottlenecks and delays in grid connections that occurred last year in February and March ahead of incentive reductions. 

Recently, SEIA and GTM Research forecast that PV installations in the US would reach 6.5GW in 2014, up 36% from the previous year. 

The US installed 1.3GW in the first quarter and 1.1GW in the second quarter, requiring 4.1GW installed in the second half of the year to reach the 6.5GW forecast
IHS noted that it expected the US to install 2.3GW in the fourth quarter. 

With the SEIA/GTM figures and forecasts for the US market having become the de facto standard, both IHS and NPD Solarbuzz figures tend to hover around SEIA/GTM’s, which would indicate that around 1.8GW was installed in the third quarter, despite the SEIA/GTM figures for the quarter yet to be released. 

According to IHS, the second biggest market in 2014 is going to be Japan, with the market research firm forecasting installations of 9.1GW.

NPD Solarbuzz recently said that demand from Japan is forecasted to exceed 5GW in the second half of 2014, bringing full-year installs to around 10GW. 

2015 forecasting

IHS also noted that it expected PV market demand growth to slow slightly from the 20% growth rate expected in 2014. Countries such as Japan are expected to peak in 2014, while growth in China is expected to slow to 10% in 2015. 

As a result, global PV installations in 2015 are expected to reach around 53GW, indicating a growth rate of 16%. 

If we took the 16% growth rate of IHS and added this to NPD Solarbuzz’s expected 2014 installation level, then 58GW could be NPD Solarbuzz’s forecast for 2015. 

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