Consistently producing forecasts well below actual developments while also continuing to release press information significantly after the close of business in Europe, hasn’t helped iSuppli's position as a trusted market research firm covering the photovoltaics industry. However, one aspect could have been rectified with a stomping revision to its forecast for global PV installations for 2010. iSuppli now projects solar installations will reach 13.6GW this year, an increase of 93.6% compared to its estimates of installations reaching 7.0GW in 2009. The market research firm had previously forecast PV installations to reach 8.3GW, up 64% from 2009.
The market research firm cited that the massive change in its forecast was due to a significant surge in demand in Germany, combined with expected plunging prices, making solar increasingly attractive.
According to iSuppli, PV installations in the second and fourth quarters will be key periods for robust growth, in part due to the poor winter conditions in Europe. The rush to beat feed-in tariff changes in Germany will drive growth.
“Reduced feed-in tariffs in Germany are coming in July, and consumers in that country will rush to install PV systems before that incentive becomes less compelling. A market correction will happen in the third quarter, leading to a huge fourth quarter due to the approach of other countries’ FIT deadlines in January 2011,” noted Henning Wicht, director and principal analyst for PV at iSuppli.
Wicht thinks that the period after the midyear changes to the German tariff system will lead to further plummeting prices last seen in 2009, when market demand in the first half of the year was weak and overcapacity was at its height.
“Plummeting prices for solar panels during 2009 now are being reflected in system prices,” noted Wicht. “These price declines will compensate for the FIT reductions, resulting in a favorable return on investment for homeowners and project developers. In some cases, the ROI will remain higher than 10%.
“Needless to say, these quarterly ups and downs in 2010 will result in a difficult year for the PV supply chain and production planners as they struggle to figure out how much is needed, where it is needed, and when is it needed. Because of this, there could be material supply constraints during the year. Spot shortages of inverters, and perhaps panels, could curtail growth to some degree,” added Wicht.
In another bullish prediction, the market researcher believes that the significant capacity expansions taking place by c-Si module producers will not be enough to avert potential supply constraints in 2011. The rationale that iSuppli gives is that global PV installations will rise to 20.3GW in 2011, nearly triple the 7.0GW in 2009.
Based on iSuppli’s analysis of capacity announcements, unless additional expansions take place, crystalline-silicon modules could encounter constraints in 2011. iSuppli forecasts that utilization rates for c-Si module production facilities will climb to more than 90% in 2010. Furthermore, many Tier 1 suppliers of c-Si modules and cells will be sold out. Tier 2 and Tier 3 module suppliers are seeing business pick up, as they strive to supply Germany with the modules it needs.
Despite the short-term supply challenges, the outlook for global PV installations remains bright. By 2011, global PV installations will rise to 20.3GW, nearly triple the 7.0GW in 2009.
iSuppli believes that manufacturing utilization rates will climb to more than 90% in 2010 for c-Si module producers.