IHS raises 2014 PV forecast to 47GW; next expansion cycle imminent

However, IHS has raised its forecast to 47GW in 2014, while expecting strong demand through 2018, resulting in annual demand reaching over 70GW.

At Intersolar Europe, trade association the European Photovoltaic Industry Association provided its near-term market forecast, noting that it expected demand to reach 69GW in 2018.

“PV solar installations have been decelerating in the first half of 2014 because of a slow start to the year in China,” said Jessica Jin, PV analyst at IHS. “However, installations are expected to gain major momentum in the second half, mainly driven by increases in China, Japan, the United States and the United Kingdom. Double-digit growth in these countries will more than offset major declines in once-hot markets like Germany, Italy and Greece, resulting in a 24% global increase in megawatts installed for the year.”

Next supply chain capacity expansion phase

IHS is expecting the next major phase of capacity expansions up and down the supply chain to start as soon as the second half of this year.

The market research firm expects the next four years to see incremental increases in polysilicon production that could reach 95,000MT of new capacity through 2018.

In the ingot/wafer segment, which has seen only a small level of capacity additions in the last three years, IHS is forecasting new capacity of around 28GW through 2018.

Solar cell capacity is also expected to catch up with recent module expansion plans by many of the tier-one manufacturers, as capacity expansion of around 27GW is expected in the same time frame.

IHS also noted that module capacity is expected to increase by around 23GW through 2018.

“Having run their facilities at high utilisation rates for the past several months, the big PV suppliers now have enough cash to start preparing for the next phase of growth,” added Jin. “Their profit situation is bolstering their confidence in sustainable market development and propelling capital expenditures. Moreover, R&D efforts of the leading manufacturers will drive down production costs faster than prices decline in the upstream PV supply chain. Therefore, IHS expects the industry’s average gross margin to remain in the double-digit range.”