IMS Research: German PV installations to exceed 2010 level on declining prices

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A glut of modules and PV inverters are to revitalise the German solar market this year as prices are falling to a degree that the makes investing in solar financially attractive again. However, despite a very weak first quarter, installations are set to show strong growth through the rest of the year, peaking in the fourth quarter and exceeding installation figures of 7GW in 2010, according to the latest forecast from IMS Research.

Another key market, Italy is poised to return back to life now that the new FiT has been introduced. However, IMS Research’s latest analysis of global PV demand revealed that installations will grow just 15% in 2011, reaching 21GW of new PV capacity, up from around 18GW in 2010.

Although market dynamics have changed, the 2011 forecast is only 0.5GW higher than a forecast issued earlier this year.

“Europe’s share of the PV market will fall considerably in the next 3-5 years; in fact, we predict European installations will decline in both 2011 and 2012 and will not return to the 2010 level for quite some time”, commented PV research director Ash Sharma. Sharma pointed towards the falls in major markets as the reason for this.
“Despite many governments indicating that renewable energy will become a larger part of their energy policies in the wake of the Fukushima crisis, it is less clear whether this talk will translate to real support for the PV industry. The governments associated with most major markets have either cut incentives recently, or indicated that they will do soon. We predict demand from Germany and Italy alone to fall by 3 GW in 2012, and Europe’s share of global demand to fall from 80% in 2010 to 56% in 2012”, added Sharma.

IMS Research believes that despite the challenging first quarter this year, its 2012 that will actually prove to be a problem. The market research firm expects a single-digit decline for PV installations in 2012, as Europe weakens and uncertainty in the USA and Asian markets takes hold as further government support mechanisms are not known.

“Yet again the outcome of the PV industry’s development in 2012 will be entirely dependent on reducing costs rapidly enough in order to keep prices in line with incentives in major markets. Although margins are now being squeezed and prices are beginning to fall, further reductions are needed in 2012 and the key now lies in polysilicon and wafer supply to do this,” noted Sharma.

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