Return of demand elasticity in Germany as solar installations
set to soar, says IHS iSuppli
Oct. 3, 2011 - Mark Osborne - pv-tech.org
 Finally,
demand for PV installations in Germany is set to
soar, according to the latest report from market
research firm IHS iSuppli. It didn’t happen
in the third quarter as many had expected -- after
weak installation figures in the first-half of the
year meant there were no midyear FiT regressions.
Weak demand and manufacturing overcapacity have seen
continued price declines, eliciting the questioning
of when demand elasticity would kick-in. German PV
installations are now forecasted to reach 5.9GW in
2011, down 20.4% from 7.4GW in 2010.
The overall decline in installations may be not
be viewed as a positive within the industry, but
the weak demand environment until now means a mini-boom
for suppliers and installers through to the end of
year.
The spike in demand is said to be due to the realization
that a 15% reduction in the German FiT is only three
months away.
However, the supply chain may prove to be a bottleneck,
according to the market research firm.
“Given the sluggish demand in the third quarter,
the major Chinese suppliers reduced their factory
utilization levels in the third quarter,” noted
Henning Wicht, senior director and principal analyst
for IHS. “Because of this, some Chinese suppliers
may not be able to ramp up production in time to
capitalize on the demand surge in Germany. With delivery
time of six weeks, these suppliers have a short window
of opportunity to get their products shipped to Germany.”
Wicht said that Tier 1 and Tier 2 module manufacturers
that are closely linked to wholesalers in Germany
should do well out of the mini-rush but nonbranded
and lower-tier suppliers may not do as well, since
many sell on the spot market and may find the geographical
distances in shipping too long to fully capitalise
on the market demand dynamics.
Overall, global PV installations are forecasted
to grow 21.7% in 2011 and slow to 13.7% growth in
2012, according to IHS.
However, installations in Germany are set to decline
for several years in a row, decreasing 15.3% next
year to 5GW.
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