Market research firm iSuppli Corp. has revised its growth forecast for the PV industry for 2009, due to the strong level of installations in Germany since midyear as the rapidly declining module prices proved too alluring. As PV-Tech noted in a recent blog, the German market is hot right now and many research firms, including iSuppli, could find themselves with forecasts well below actual installation levels, unless they have made upward revisions.
The market research firm now expects PV installations to reach 2.5GW in Germany, in line with GTM Research and EPIA, but lower than Photon Consulting’s projection of 3.9GW. The previous forecast from iSuppli's Senior Director of Photovoltaics Research, Henning Wicht, was 1.53GW of installations in Germany.
“Solar-panel installations in Germany began surging to record levels in July as prices for PV systems plunged,” said Wicht. “This phenomenon has boosted the global solar panel business and mitigated the severe oversupply situation that has stung the industry throughout this year.”
The inevitable result is a global upgrade to installations, now projected to reach 5.2GW in 2009, up from iSuppli’s former expectation of 3.9GW, which was revised downward from a May 2009 forecast of 5.235GW. Although not in positive growth territory, installations will fall only 3.8% from 2008. This is a significant change compared to its forecast in May of a 32.3% decline.
The other important knock-on effect, according to Wicht, is that the massive module inventory in the supply chain is declining. Global supply of solar panels is expected to exceed demand by 65.9% in 2009, down from iSuppli’s August forecast of a 91.9% overage.
However, this would still result in a significant amount of modules produced but not installed. The challenge is reconciling iSuppli’s inventory overhang figures with recent financial results from a swath of module producers, noting that inventory levels are declining and production is being better matched to demand. Many German module manufacturers noted they were at full production and couldn’t meet demand, suggesting little inventory in the supply chain.
“Supply and demand dynamics in the fourth quarter will set the tone on whether the oversupply situation continues in 2010,” Wicht said. “If panel makers reduce production during the fourth quarter of this year, anticipating the seasonally weak first quarter in Germany, then supply and prices could stabilize.”
Wicht also noted that he expects price erosion to continue, especially in the German market, to maintain demand. He believes that system prices need to be reduced by 10% in 2010. Distributors and wholesalers are already preparing price reductions for 2010 to fuel continued demand.
The strong demand seen in the second-half of the year has also resulted in the market research firm making significant changes to its forecast in each year through 2013. Installations in 2010 are expected to reach 8.34GW on a global basis. In 2011, installations are forecasted to be 12.09GW, 19.4GW in 2012, and almost 30GW in 2013.