The optimism within the PV industry that 2010 would be the best on record goes unabated, however projecting demand in 2011 is proving more problematic. That hasn’t stopped market research firm, Solarbuzz from sticking its neck-out and projecting that the first quarter of 2011 could be the most challenging for the industry next year as it expects market demand to be less than 50% of PV module production.
Solarbuzz sees several negative trends looming on the horizon. Firstly, it expects a serious decline in PV installations in the hottest market, Germany as new FiT reductions kick-in. Secondly, doubts over other solar FiT supported countries, such as the Czech Republic will also put pressure on rising module inventories.
Overall, the market research firm expects a demand reduction in 2011, yet said it had raised its demand forecast for the next 5-years. Many market research firms remain cautious over growth next year, albeit at single-digit levels. Many have cited the U.S. and China as key new growth markets in 2011 and beyond, which would go a long-way in filling any demand declines seen in Germany.
However, according to Solarbuzz in its latest quarterly industry report, the industry remains on target to deliver over 15GW installations this year and no change from its forecast of June, 2010. Confidence comes from the fact that PV demand has soared since the first quarter, noting that demand reached 3.82GW in the second quarter, 54% Q-on-Q.
Global market demand was only 2% less than the global market’s previous quarterly peak (3.92 GW in Q4’09), with total industry revenues of approximately US$17.2 billion in the quarter, compared to US$12.0 billion in the first quarter and only U$6.2 billion in the same quarter a year-ago, noted the Solarbuzz.
“The rush to install in Germany ahead of tariff declines in mid-2010, combined with strong incentive programs across Europe (especially in Italy, France and the Czech Republic) and an improved financing environment, drove the global PV market over three times the level in Q2’09,” noted Craig Stevens, President of Solarbuzz.
In the second quarter, demand in Germany was put at 2.3GW and accounted for 60% of global demand. Italy, which was said to be the second largest market grew 127% quarter on quarter, was just 11% of the size of the German market. The U.S. AND France also put in strong performances.
According to Solarbuzz, polysilicon, wafer, and cell manufacturers reached capacity utilization rates of between 75% and 87% in the second quarter, which assisted in an increase of 495MW in wafer supply over the past quarter. Wafer capacity represented the most constrained part of the industry chain.
The market research firm also noted that in respect to cell manufacturer shipments, the Top 5 in the quarter were First Solar, Suntech Power, JA Solar, Yingli Green Energy and finally Trina Solar.
Among the Top 12 cell manufacturers in Q2’10, six Chinese manufacturers accounted for 55% of shipments, up from 43% a year ago.
Not surprisingly, with sold-out signs hanging over the majority of PV manufacturers in 2010, Solarbuzz noted that there were modest rises in short term contract prices in Europe in the quarter. This came after six consecutive quarters of price declines.
However, weighted average factory gate modules prices are still down 24% in U.S. dollar terms from one year-ago, apparently.
Solarbuzz noted that first-tier Chinese cell and module manufacturers that had priced competitively in the first six months of the year had moved in to a forward sold position, which, in turn, allowed European factory gate prices to rise 2-4% by the beginning of Q3’10. A strong yen is helping to ensure that Japan remains one of the best markets to place product, according to the market research firm.