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Cambridge, Mass.--The global solar PV market is poised to have a banner year, according to the recently published market outlook from GTM Research: 2010 Global PV Demand Analysis and Forecast, but some suppliers will encounter difficulty navigating the forthcoming ebb and flow of subsidy programs and increasing module overcapacity.
Buoyed by a continued demand boom in Germany ahead of expected feed-in tariff cuts and second half growth in secondary markets, GTM Research estimates that demand for PV installations will reach 11.2 GW in 2010, up 58 percent from 2009. This will enable $18.9 billion in revenue for global module manufacturers.
German Demand Will Peak in 2010
In 2010, Germany will remain the world's largest market, installing over 5.5 GW. But demand will not be steady or even. Germany's star will begin to fade in the second half of 2010, when feed-in tariff cuts intended to quell runaway market growth will take effect. The German market will decline substantially in the third quarter, forcing module prices to resume their decline after a steady first half. These lower prices will enable a smaller demand rush in the fourth quarter ahead of annual feed-in tariff digression.
After 2010, feed-in tariff digression will force Germany to return to a steady sub-4 GW annual market. This will solidify Germany's position as the largest national market through 2013, although its market share will fall each year.
Italy and the United States Will Begin to Take Flight
While German demand begins to decline, secondary markets will grow substantially. According to Shayle Kann, Senior Energy Analyst at GTM Research and the report's author, "Members of the global PV industry are primarily looking toward Italy and the U.S. as replacements for lost German demand. Italy will experience an immediate demand boom as installations are rushed ahead of a planned feed-in tariff cut. As a result, Italy will install nearly 1.5 GW and will remain the second largest national market in 2010. The United States will serve as a longer-term growth market, but its fractured nature and slow project cycle times will preclude drastic demand growth within a single year."
Over the next four years, global PV demand will increasingly be spread out among a number of markets and the recent boom/bust cycle will begin to dissipate. By 2013, there will be at least five individual markets installing over 1,000 MW annually, with the United States reaching over 2.8 GW and surpassing all countries except Germany.
Despite Demand Growth, the Global Supply/Demand Imbalance Will Worsen
Kann warned that demand growth will not necessarily mean easy expansion for suppliers. Over the next four years, producible module supply 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 will outpace growth in demand by an average of 26 percent per annum.
The impact of this overcapacity will be felt most acutely in 2011, when the global market will grow only 12 percent as a result of falling German demand. As a result, suppliers will be forced to aggressively seek secondary 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, but successful suppliers will share in a market rising above $20 billion in annual module sales revenue.
Thin-Film Will Grow to 30 Percent Market Share by 2013
The promise of thin-film technologies will begin to match reality over the next four years, as winning proponents of newly commercialized modules, as well as First Solar's CdTe, will find increasing demand for their products. But while thin film's market share of demand will grow to 30 percent by 2013, some technologies (particularly amorphous silicon) will have an even larger share of manufacturing capacity. As a result, high-margin thin-film production will be enjoyed by a select few suppliers.
Detailed analysis of eleven key PV markets, as well as forecasts of demand, module pricing, market share by technology, and project economics can be found in the report.
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