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Market Watch

Global Photovoltaic Market Will Finish Year with Slower Growth

Germany, China, Italy, US and Japan will be the Top 5 solar markets for the year

November 16, 2012

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Global photovoltaic (PV) installations will finish the year with discernibly lower growth than in 2011, undercut by softer demand in light of continuing economic uncertainties and a general cooling in solar markets worldwide, according to an IHS Solar PV Demand market tracker report from information and analytics provider IHS.

Total PV installations this year are forecast to finish at 31.12 gigawatts (GW), up from 27.98 GW in 2011. Although growth this year is at the double-digit rate of 11 percent, it is no match for the massive 55 percent expansion of 2011 and even the unexpected 36 percent increase the market enjoyed in 2009, the most challenging year for the PV space during the height of the global economic recession.

The quarterly figures tell the story in greater detail. While global PV installations climbed in the second quarter this year, the market contracted in the third quarter after demand from Europe eased and the Asian markets, especially China, did not pick up as quickly as expected. Fourth-quarter levels are projected to rise from the third, but the increase will amount to just slightly north of what installations had been in the second quarter—within a range of 8.7GW.

Worldwide PV Forecast

 

In contrast to the inconsistent quarterly growth pattern of 2012, the trend in 2011 saw the market grow visibly stronger every quarter. Last year, increases of 3.0GW occurred for each quarter from the second all the way to the fourth. And unlike the anemic second half of this year, 68 percent of installations in 2011 took place during that year’s extremely robust second half.

Overall, the renewable solar power industry is less energetic this year because of a cut in incentives in several key European markets. The reductions are in addition to the economic distress going around the world—from financial turmoil in the euro zone, to slowing growth in China, to persistent high unemployment in the United States. Major PV players have reduced their factory utilization in response to weak solar demand, with production at Tier 1 PV module manufacturers falling by as much as 70 percent in July compared to the same time a year ago.

Many eyes remain on China, where a strong fourth quarter is possible if delayed projects are implemented. China is already reducing solar module shipments to Europe voluntarily, pending the final results of an anti-dumping investigation in the European Union. Movements on that front, along with the overall sluggish state of PV demand in the world and a continuing trade war with the United States, will force the Chinese government to further focus on stimulating demand domestically, IHS Solar believes. Installed PV capacity in China will amount to 4.8GW this year, up from 2.1GW in 2011, qualifying the country after Germany as the world’s second largest PV market for 2012.

In Germany, the PV market enjoyed a 600 percent increase in monthly installations during June to 1.7GW, up from just 254 megawatts, largely because a grace period for solar installations was ending at that time. Germany’s boost in the second quarter played a significant role in why global PV levels rose substantially that period. Germany’s total installed PV capacity for 2012 is likely to be 7.9GW—the world’s largest for the year—up from 7.5GW in 2011. The country will remain a sustainable market for solar energy in the years ahead, with all fundamental growth parameters still in place.

Italy, the world’s largest PV market in 2011, falls to third place this year with 3.5GW, down from 7.7GW. In fourth place is the United States with 3.4GW, up from 1.9GW last year.

Rounding out the Top 5 is Japan with 2.5GW, up from 1.3GW. Japan, like China and Germany, has the potential to boost the PV global total by year-end if a new solar subsidy program is adopted quickly in the country. An upside potential of 1.5GW exists in Japan for the fourth quarter, compared to 0.5GW each in China and Germany, along with another 1.5GW for the remaining solar territories around the world.

If all of the upside potential is realized, the combined growth for these markets could push global PV installed capacity in 2012 to a best-case prospect of 35.1GW—4.0GW more than the likely projected total for year-end.

Read More >> PV Demand in Q4 Will Come from Asian Markets

Geography
China Europe Germany
Research by Market
Power & Energy Technology
Category
Solar
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