According to NPD Solarbuzz, the PV industry has reached a tipping point that will propel the sector to an unprecedented demand in 2014.
The market research firm has raised its recently issued bullish forecast with demand reaching 49GW in 2014, compared to a range of 45GW to 55GW.
“The solar PV industry has reached a critical tipping point, with end-market demand hitting record levels almost every quarter,” noted Finlay Colville, vice-president at NPD Solarbuzz. “This growth is being driven by leading module suppliers and project developers that returned to profitability during 2013, and which have now established highly-effective global sales and marketing networks.”
NPD Solarbuzz also said that it expected PV demand in 2013 to have hit 36GW, with the fourth quarter exceeding the 12GW for the first time ever.
The record demand in the fourth quarter was said to be driven by China, Japan, and the US, accounting for two-thirds of all solar modules installed in the quarter.
The explosive growth is set to continue into the first quarter of 2014, which will also be a new record for the PV industry for a first quarter that has historically been a slow quarter due to weather conditions in the once dominant European market.
The market research expects strong growth throughout 2014, forecasting that between October 2013 to March 2014, PV installations will reach almost 22GW.
Putting that in perspective, NPD Solarbuzz said that such a level of installations is greater than all installations between 2005 and 2009, globally. The expected 22GW of demand is equivalent to 120MW of PV installations every day for six months, equating to one new 5MW solar farm being completed every hour of the day!
The market research firm noted that the 49GW of end-market demand next year will push production utilization rates above 90 percent for tier-1 manufacturers, while pushing many to increase production outsourcing from wafers, cells and through to modules.
"Manufacturing over-capacity and pricing erosion within the PV industry was previously a key factor in limiting annual growth to between 10-20 percent between 2011 and 2013,” added Colville. “With a more stable pricing environment and the prospects of increased end-market globalization, NPD Solarbuzz forecasts a return to annual growth above 30 percent for the PV industry in 2014.”
NPD Solarbuzz also expects leading Chinese c-Si module suppliers will have reached silicon and non-silicon costs below US$0.50 per watt, while prices remain stable, leading to confidence from profitability to enter a new capacity expansion phase that has been on hold now for 18 months.
Recent forecasts from Deutsche Bank and Yingli Green both suggested significant demand existed in 2014 that could reach 50GW.
However, in contrast to the Deutsche Bank, Yingli Green and NPD Solarbuzz camp, IHS, Mercom Capital and EnergyTrend have also released recent forecasts that signify only moderate growth from 2013 within a range of 40GW to 43GW.
As far as NPD Solarbuzz is concerned, the continued cost reductions, coupled to a major downstream move by tier 1 manufacturers and established project developers and PVEP’s (PV energy providers) is creating its own demand dynamics through aggressive downstream sales teams.
The momentum of gaining access to low-cost finance for PV projects via securitization and other financial vehicles could also be a key contribution to the expected explosive growth next year.