2010 Global PV Demand Analysis and Forecast

by Shayle Kann

Between 2000 and 2009, global PV demand grew at an average annual rate of 51 percent, rising from 170 MW to 7,059 MW. Despite this impressive rate of growth, the past two years have witnessed a fundamental and difficult market shift for manufacturers. Previously, burgeoning European feed-in tariff markets enabled global demand to exceed available supply, driving up feedstock prices and attracting new entrants across the value chain. But the combination of an ensuing rapid capacity build-out and the financial crisis of 2008 and early 2009 shifted market power downstream into the hands of project developers and financiers. Today, global manufacturing capacity greatly exceeds global demand. With an estimated total of 16.1 GW of module manufacturing capacity online by the end of 2010, the global PV market is no longer constrained by supply.

In addition, 2010 will mark the beginning of a global PV market diffusion. Over the past few years, PV demand has been characterized by a series of gold rushes in which the majority of production flows into a single uncapped feed-in tariff market (e.g., Spain in 2008, Germany in 2009). But the gold rush is necessarily followed by the government reducing, and often capping, incentives in order to constrain market growth. This leads manufacturers and developers to seek the next gold rush, and new markets are suddenly flooded with additional inventory. But as Germany's star begins to fade in the second half of 2010, no individual market will emerge to soak up excess inventory in sufficient volume to become the singular focus of global demand. Instead, demand will become increasingly spread amongst a growing class of markets around the world.

Making strategic decisions in the new global market requires a deep understanding of emerging growth markets and the interplay among demand centers. This 246-page report represents our latest annual comprehensive analysis of global PV demand. It examines the characteristics that led the global PV market to grow in 2009 despite the global financial crisis, and applies these lessons in order to forecast demand and market conditions through 2013. The report scrutinizes demand drivers, market constraints, and project economics in 11 key national PV markets, and develops a global market outlook through 2013. In sum, this report provides a roadmap for the near-term future of global PV demand for developers, suppliers, and investors.

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For each of eleven major PV markets, this report contains:

  • Discussion of historical PV policy, recent political developments, and policy outlook
  • Identification of country-specific technological factors and the role of individual technologies in shaping the market
  • Analysis of project financing
  • Ten-year historical installation volumes
  • Demand forecast through 2013
  • Comprehensive economic project models for one to three representative projects in each market
  • Average pre-tax equity IRR for each project
  • LCOE analysis and grid parity projection for projects in Japan, the United States, and Italy
  • Module, inverter, and BOS pricing assumptions
  • Payback period estimates for residential projects in the United States and Japan
  • Demand curves through 2013 for leading price-driven markets
  • Sensitivity analysis on module pricing and interest rates
  • Total electricity generation by source
  • Insolation map
  • Average retail electricity prices
  • Historical demand and policy timeline

For the global PV market, this report contains:

  • Analysis of 2009 global PV market dynamics
  • Global supply curves through 2013
  • Global demand projections through 2013
  • Demand projections by country and region through 2013
  • The impacts of Germany's feed-in tariff cuts on the global market
  • Module pricing forecast by technology through 2013
  • Market share by technology through 2013
  • Supply/demand imbalance and projection of overcapacity through 2013
  • Market size and module sales revenue forecast through 2013

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Shayle Kann Senior Advisor

Shayle Kann advises GTM Research, the market analysis, advisory and consulting division of Greentech Media. GTM Research analyzes and forecasts the dynamics impacting the transformation of the global electricity sector. An expert on next-generation energy, he has presented at conferences around the world, been featured in publications such as The Economist, New York Times, Wall Street Journal, Washington Post, Forbes, Bloomberg, Reuters, and Financial Times, spoken at Harvard, Yale, MIT and Columbia, and testified in front of the U.S. House of Representatives.

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