The global solar PV market ispoised to have a banner year, according to the recently published market outlook from GTM Research: 2010 Global PV Demand Analysis and Forecast, but somesuppliers will find difficulty navigating the forthcoming ebb and flowof subsidy programs and increasing module overcapacity.
Buoyed by a continued demand boom in Germany ahead of expectedfeed-in tariff cuts and second half growth in secondary markets, GTMResearch estimates that demand for PV installations will reach 11.2 GWin 2010, up 58 percent from 2009. This will enable $18.9 billion inrevenue for global module manufacturers.
German Demand Will Peak in 2010
In 2010, Germany will remain the world’s largest market, installingover 5.5 GW. But demand will not be steady or even. Germany’s star willbegin to fade in the second half of 2010, when feed-in tariff cutsintended to quell runaway market growth take effect. The German marketwill decline substantially in the third quarter, forcing module pricesto resume their decline after a steady first half. These lower priceswill enable a smaller demand rush in the fourth quarter ahead of annualfeed-in tariff digression.
After 2010, feed-in tariff digression will force Germany to return to a steady sub-4 GW annual market. This will retain Germany’s position as the largest national market through 2013, although its market sharewill fall each year.
Italy and the United States Will Begin to Take Flight
While German demand begins to decline, secondary markets will growsubstantially. According to Shayle Kann, Senior Energy Analyst at GTMResearch and the report’s author, "Members of the global PV industry are primarily looking toward Italy and the U.S. as replacements for lostGerman demand. Italy will experience an immediate demand boom asinstallations are rushed ahead of a planned feed-in tariff cut. As aresult, Italy will install nearly 1.5 GW and will remain the secondlargest national market in 2010. The United States will serve as alonger-term growth market, but its fractured nature and slow projectcycle times will preclude drastic demand growth within a single year."
Over the next four years, global PV demand will increasingly bespread out among a number of markets and the recent boom/bust cycle will begin to dissipate. By 2013, there will be at least five individualmarkets installing over 1,000 MW annually, with the United Statesreaching over 2.8 GW and surpassing all countries except Germany.
Despite Demand Growth, the Global Supply/Demand ImbalanceWill Worsen
Kann warned that demand growth will not necessarily mean easyexpansion for suppliers. Over the next four years, producible modulesupply will grow from 16 GW by the end of 2010 to nearly 30 GW in 2013.During this period, the growth of available PV module supply willoutpace growth in demand by an average of 26 percent per annum.
The impact of this overcapacity will be felt most in 2011, when theglobal market will grow only 12 percent as a result of falling Germandemand. As a result, suppliers will be forced to aggressively seeksecondary markets and heavy price competition will resume; by 2013,average PV module prices will be as low as $1.20 per watt. Manufacturers without competitive cost structures will struggle to survive, butsuccessful suppliers will share in a market rising above $20 billion inannual module sales revenue.
Thin-Film Will Grow to 30 Percent Market Share by 2013
The promise of thin-film technologies will begin to match realityover the next four years, as winning proponents of newly commercializedmodules, as well as First Solar’s CdTe, will find increasing demand fortheir products. But while thin film’s market share of demand will growto 30 percent by 2013, some technologies (particularly amorphoussilicon) will have an even larger share of manufacturing capacity. As aresult, high-margin thin-film production will be enjoyed by a select few suppliers.
Detailed analysis of eleven key PV markets as well as forecasts ofdemand, module pricing, market share by technology, and projecteconomics can be found in the report.
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