Coming off the strong year that was 2010 in the global solar photovoltaic world, Solarbuzz’s Quarterly report has countered that 2011 may be a rockier road. The research company is estimating that Germany’s first quarter 2011 end-market demand for solar PV has been performing at less than 50% of what it was in the first quarter of 2010 and maintains that even though module manufacturers worldwide have been reducing prices, the market has yet to feel a positive effect.
Solarbuzz contends that 2011’s first quarter has seen module manufacturers trying to grow their sales channels and take on a more diverse set of distributers and brokers in hopes to produce higher production volumes and achieve better factory gate prices. According to the quarterly report, these actions have led to unsustainable levels in downstream inventories in both Europe and the U.S.
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“2011 will be a challenging year for the industry as it manages a slowdown in the market,” said Craig Stevens, President of Solarbuzz. “Europe will not be the growth engine it has been in recent years, and manufacturers will need to access new markets or be exposed to the risk of rising inventories or production cuts during a period of falling prices.”
However, despite the rather dull results that Solarbuzz has found in this year’s first quarter, it notes that global demand in 2011’s second quarter is still predicted to reach 7.4GW, which would show a 77% year over year growth. The growth will be a direct result of the feed-in tariff (FiT) cuts that are scheduled to occur by the middle of this year in the top five European markets. With FiT cuts reaching as high as 45% in some markets, the second quarter will be a period where companies look to beat the mid-year FiT cuts, especially in Germany and Italy, thereby promoting growth in the solar PV markets such as Europe, the U.S., Canada, China and India.
Solarbuzz’s report continues by acknowledging that module manufacturers are striving to raise shipments in 2011 by 55%, while full-year demand is anticipated to increase by only 12%. The analysis warns that after the demand peak expected in the second quarter, the PV industry will be faced with a challenging second half of the year as it comes face to face with a supply and demand imbalance. According to Solarbuzz, a negative production growth period will be required so as not to build an excessive inventory.
Taking all the expected occurrences for the solar PV world during the first half of this year, Solarbuzz states that by the fourth quarter of 2011, market share for Chinese, Taiwanese and rest of world producers is estimated to reach 74%, a 66% increase from market share in 2010’s fourth quarter. Solarbuzz predicts that First Solar and the lowest-cost Asian producers will be the least susceptible to impacts in shipment reductions during the second half of 2011, but stresses that all manufacturers will be confronted with price pressure by the end of the year. Further, the report sees lower cost Chinese and Taiwanese manufacturers being able to reap the rewards from added outsourcing of production from the chief Japanese and Western solar manufacturers.
