NPD Solarbuzz’s latest Solarbuzz Quarterly report has found that PV manufacturers are likely to increase their shipments this year due to strong early-year PV market demand and a changing policy environment in Europe. The report notes that Q4 2011 global industry and end-market revenues were US$354 billion, the highest level since Q4 2010, however, revenues are expected to drop to US$22 billion in Q4 2012 because of a drop in volume and prices.
“Major cell and module manufacturers are projecting shipment growth of 23% in 2012, considerably less than the 40% they had initially planned for 2011 at the same point last year. The acceleration of demand into 1H’12 will initially support these growth plans,” said Michael Barker, analyst at NPD Solarbuzz. “However, the quarterly 2012 forecast anticipates the need for production cutbacks in Q4’12, resulting in only 13% shipment Y/Y growth by the end of 2012.”
The report goes on to speculate that Chinese, Taiwanese and rest of world manufacturers that grew their production shares to 78% in Q4 2011, from 69% in Q4 2010, are expected to once again increase, albeit moderately, to 79% by Q4 2012. Furthermore, upstream module inventory days were found to have decreased 24% quarter over quarter at the end of Q4 2011 due to production cutbacks coupled with increases in shipments from some manufacturers in the last quarter.
“Major PV companies no longer have the balance sheet flexibility to absorb large additional cuts in prices,” added Barker. “They will need to watch the supply/demand balance closely in order to avoid further pressure on gross margins.” The report found that vertically integrated Western and Japanese manufacturers had negative margins for Q4 2011, the third consecutive quarter, while Chinese Tier I gross margins fell from 12% to 7%.