The global photovoltaics (PV) industry will be hit hard this year by the ongoing economic recession, with full recovery not expected until 2011, according to a report by market research company iSuppli Corp.Worldwide PV-system installations will decline 32% to 3.5 gigawatts (GW) in 2009 from 5.2GW a year earlier, as suppliers wrestle with sluggish demand, sharply lower prices and excess production capacity, says Henning Wicht, the study’s author and principal PV analyst at iSuppli.
He forecast global PV revenue will plunge 40.2% to $18bn from $30.5bn in 2008, while the average price per solar watt will decline 12% this year.
Wicht notes that emerging markets such as China are not expected to pick up the slack in PV demand this year.
"For years, the PV industry enjoyed vigourous double-digit annual growth in the 40% range, spurring a Wild-West mentality among market participants," he says.
"An ever-rising flood of market participants attempted to capitalize on this growth, all hoping to claim a 10% share of the market revenue by throwing more production capacity into the market,’’ he adds, which led to overproduction at a time of declining demand. The situation is somewhat analogous to the personal computer shakeout in the mid-1980s, and will result in a stronger industry medium-term, he concludes.
The study forecasts 57.8% industry revenue growth in 2011, with similar growth the next several years as demand improves. This will result from "fundamental drivers" of solar growth like cost reductions, tax breaks and government incentives such as those the US Congress passed in March, says Wicht.
For all the financial misery being felt by many PV industry players, Wicht contends: "PV remains attractive because it continues to demonstrate a favourable return on investment."
Cost per watt reductions will also open new markets in the years ahead as a result of productivity drives and lower polysilicon prices, he says.
The study did not change iSuppli’s earlier forecast 2009 market major leaders:
Leading crystalline PV cell manufacturers – Estimated 2009 production
Suntech 854MW +358MW versus 2008
Q-Cells 817MW +236MW
JA Solar 526MW +250MW
Sharp Electronics 500MW + 19MW
BP Solar 481MW +149MW
Gintech Energy 475MW +144MW
Trina Solar 457MW +232MW
Motech Industries 442MW +173MW
SunPower 418MW +135MW
Yingli Green Energy 405MW +135MW