Global PV Surges

Nov. 22, 2011 - Bill Opalka - energybiz.com

Europe still rules the global solar markets, but grip is slipping. While the global market for solar photovoltaics will surge 24 percent this year over last, that has not led to high demand in the second half of the year due to high inventories.

That’s according to a new study by IMS Research that says global solar PV installations will reach 24 gigawatts in 2011 despite a relatively weak start to the year. Installations will rise by 24 percent, up from 19 gigawatts in 2010. European installations will rise by just 3 percent this year and that Italy will displace Germany as the world’s largest market.

It’s interesting that Italy is now, and temporarily, the world leader. One doubts that will be the case in a year. But that also points out the dynamic of how incentives, if poorly designed, can skew the marketplace.

Germany surged, then it declined. Italy followed suit and will surely recede. With an uncertain policy framework, will the United States follow suit?

The U.S. will approach 2 gigawatts this year for all solar technologies, doubling its previous mark of about 1 gigawatt in 2010.

IMS Research’s PV Demand Database shows that installations exceeded 8 gigawatts in the first half of 2011 and will reach 15 gigawatts from July through December.

Installation growth has not meant a demand surge for PV components because of high inventory levels. “Despite installations in the second half of the year being almost double those in the first half, most suppliers didn’t see any considerable uptick in orders. This is simply as a result of the high inventory levels in the channel,” said Ash Sharma, senior research director for photovoltaics. Earlier in the year, IMS Research estimated module inventory stood at 10 gigawatts.

IMS Research found that though Europe is stagnating, the American and Asian markets are performing well and will generate 85 percent of the global growth in installations in 2011.

“The PV market continues to diversify in 2011; this will create short-term pain for suppliers that can no longer solely rely on one market to fuel their growth, but creates long-term stability for the industry by helping to balance the effects of a single country’s incentive policy and reduce large swings in supply and demand,” Sharma said.

The firm predicts that the U.S. will become the third largest market this year, while China will be the fourth largest. With a trade war looming on the horizon, how long will those positions remain in place?