Global PV demand of 18GW in 2011 is being projected by investment bank, Roth Capital Partners. Concerns of major overcapacity in module production exist but estimates bankable module supply is in the 21GW range and would only exceed demand by approximately 18%. Low-cost bankable module manufacturers are expected to see utilization rates remain in the 90% range. Roth believes ASP declines of as much as 30% are not expected, while ASP declines of approximately 15% are more realistic for this year.
Roth Capital Partners noted that it expected global demand for solar modules to be 15.8GW in 2010, a 119% increase compared to the previous year.
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Although Roth expects a decline in demand in Germany the investment bank expects markets such as Italy, U.S. and Japan to show strong growth in 2011. Upside potential also exists in other markets such as China, U.K., and Canada.
Roth Capital Partners forecasts German market demand of 6.1GW in 2011, compared to 8.1GW in 2010, a 25% decline.
However, the firm projects demand in Italy will reach 2.5GW in 2011, up 67% over 2010 figures. The U.S. is projected to be close behind Italy at 2.3GW, a greater increase of approximately 152% over the previous year.
Japan is also noted as a fast mover this year. Roth expects demand to reach 1.8GW an 80% increase over 2010.
Module overcapacity issues
Roth calculates that there is a substantial amount of new production capacity coming online in 2011, noting that the eleven U.S-listed, Chinese manufacturers alone will expand capacity throughout the supply chain by 60% to 15GW of module supply by year-end 2011, compared with the same period in 2010. The effective 2011 supply from this peer group would likely be around 12-13GW.
Although Roth expects overcapacity to impact the industry in 2011, it noted that this would not be as severe as in 2009, when oversupply reached 37%, according to the investment bank. The average ASP in 2011 is expected to fall to ~$1.49/W from a 2010 average of $1.76/W.
Not surprisingly, Roth favours bankable Chinese module manufacturers to operate at high capacity utilization in 2011 as they will be able to absorb ASP declines better than overseas rivals.
