The pace of the European solar photovoltaic (PV) market in the firsthalf of 2010 was dominated by the impending mid-year incentive tariffreductions in Germany and conditioned by the lower module pricing thatemerged through 2009, according to the "Europe PV Markets 2010" reportissued by Solarbuzz, a SanFrancisco-based solar energy consultancy. The report provides a detailed review of Europe’s 2009 PV market and a five-year forecast.
"Despite the strength of end-market demand, which was one-third higher inGermany in the first half of 2010 than in the second half of 2009, thefirst PV module price increases of 2010 only emerged in June," notedAlan Turner, vice president of European market research for Solarbuzz."Even then, the increases in euro terms only partially compensated forthe deteriorating price picture in dollar terms caused by the euro’sdramatic decline against the dollar. Such is the strength of supplygrowth in the PV industry."
According to the Solarbuzz report,Italy became the world’s second largest PV market, with 770 MW in newlyinstalled capacity. The Czech Republic, France and Belgium combined toadd 933 MW of newly installed capacity in 2009. Growth of the totalEuropean market was just 16% in 2009, while growth excluding Spain was126%.
The report notes that the new mechanism of tariffadjustment in Germany should be effective over the 2011-2012 period insubduing the German market. Despite this, Solarbuzz believes thereremains upside potential in 2011 as European governments seek to reducethe economic burden of their national incentive programs, which willsustain pressure for continued price reduction beyond the short-termtightening around mid-2010.
"Exposure to individual countrymarkets remains a high risk strategy," Turner added, "The policy risksare simply too great and downstream solar companies need to look for ageographical portfolio that balances materiality and growth to securetheir long-term position."