IMS Research predicts utility-scale PV market will surge dramatically in 2011

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According to the latest report from IMS Research, the utility-scale PV market is set to surge in 2011, growing as much as five times faster than the rest of the industry. This high demand predicted for next year supports First Solar's recent decision to make significant increases to its production capacity expansion plans for the next two years, suggesting that the dominating thin-film supplier's production capacity will reach over 2.7GW by the end of 2012 at current line run rates. However, given its history of improving throughput, IMS Research estimates that its capacity could in fact reach over 3GW by then.

While the research analysis firm is predicting a positive 2011 for First Solar, it doesn't hold out the same hope for its competitors, who may be facing slowing demand as the German market begins to taper off. “If we look back to early 2009, while the rest of the industry experienced a stagnating market and slow demand from many countries, First Solar bucked the industry trend, significantly increasing capacity and more than doubling its shipments, increasing its market share (in MW) to 10.7%, from 6.9% in 2008,” outlined the report.

“However, in 2010, while its crystalline competitors' capacity has been added at a frantic pace, First Solar has added just one extra line and has remained capacity constrained throughout the year. As a result, although total PV installations are forecast to double in 2010, First Solar's shipments are predicted to grow by just 25%, causing its market share to shrink to around 8%,” according to IMS Research's latest estimates.

PV research analyst Sam Wilkinson said, “While much of the industry has indicated uncertainty and a possible reduction in demand in 2011 with Germany's small commercial segment likely to decrease the most in MW terms, First Solar is expecting an increase in demand for its products and a need to accelerate capacity expansions.”

“While it wasn't fully able to benefit from the booming German market which has so far favoured rooftop installations, it is now likely to see robust demand from large plants in Europe as well as its own enormous utility-scale pipeline in North America,” added Wilkinson. “IMS Research forecasts significant growth for First Solar's primary market–utility-scale PV installations–in 2011, with these systems projected to grow five-times faster than the rest of the market.”

Assuming demand remains high enough to keep the additional lines highly utilized, these capacity expansions will also aid First Solar in reducing its costs even further beyond its competitors. Already the market leader in reducing module costs, the U.S. supplier announced that it had achieved a record low of $0.74/W in Q2'10. With high demand and tight supply currently maintaining high upstream prices for crystalline PV module prices, First Solar looks ideally poised to regain market share in 2011.

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