Photon Consulting expects solar industry downturn in 2012

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According to a new report from market research firm Photon Consulting, the PV industry is looking at a supply-driven price crash on the back of expected strong feed-in tariff cuts in Germany over the next two-years, which will dampen demand sufficiently to cause a glut in modules and impact the entire supply-chain.

“Executives in the solar power sector are balancing significant, long-term opportunities against considerable near-term risks. This dynamic makes 2011 a critical decision-making year for solar executives,” noted Michael Rogol, Photon Consulting CEO. “This report pinpoints and quantifies essential industry risks and opportunities so solar decision-makers can prioritize and execute on the right next steps for their company.”

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The report is claimed to advise companies to take specific actions to address the looming saturation of the German PV market as well as providing key metrics and timing guidance on when German policymakers are expected to implement volume restrictions on PV interconnections to slow the market’s rapid installation growth.

As with 2009, the German market is expected to be the largest for PV installations in 2010. Concern is that the higher record figures for 2010, which have yet to be released, could trigger further government policies to restrict installations and the cost to consumers under the EEG system.

Photon Consulting noted that since 2000, the solar power sector has achieved a 56% compound annual growth rate in installations but the expected saturation of the German PV market would lead to the solar sector's first year of negative growth in recent history.
 

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