With a strong uptick of photovoltaic (PV) sales in Germany along with dropping prices set to boost solar demand this year, market researchers at iSuppli Corp. have dramatically upgraded the forecast for PV system installations.

iSuppli now predicts solar installations will reach 13.6Gigawatts (GW) this year, up 93.6% from 7GW in 2009. The company previously forecast in February that solar installations would reach 8.3GW, up 64% from 2009.

More than compensating for slower performances in Q1 and Q3, iSuppli says the strong rise in PV installations this year will be driven by robust market conditions in Q2 and Q4.

“This will be an up and down year for PV installations. The first quarter of 2010 was negatively affected by winter conditions, likely causing a decline in installations compared to the fourth quarter of 2009. However, the second quarter is expected to be a blockbuster for the global PV industry,” explained Henning Wicht, director and principal analyst for PV at iSuppli, in a statement.

“Reduced Feed-in-Tariffs (FIT) in Germany are coming in July and consumers in that country will rush to install PV systems before that incentive becomes less compelling. A market correction will happen in the third quarter, leading to a huge fourth quarter due to the approach of other countries’ FIT deadlines in January 2011,” he continued.

In addition to the FIT deadlines, growth in the second half of the year will be driven by reductions in the cost of solar installations, Wicht noted.

Plunging prices for solar panels last year are now being reflected in system prices, and these price declines will compensate for the FIT reductions, resulting in a favorable Return on Investment (ROI) for homeowners and project developers, he said. In some cases, the ROI will remain higher than 10%.

“Needless to say, these quarterly ups and downs in 2010 will result in a difficult year for the PV supply chain and production planners as they struggle to figure out how much is needed, where it is needed and when is it needed. Because of this, there could be material supply constraints during the year. Spot shortages of inverters, and perhaps panels, could curtail growth to some degree,” Wicht added.

Looking ahead to 2011, iSuppli believes there could be even more supply constraints, and based on its analysis of capacity announcements, unless additional expansions take place, crystalline-Silicon (c-Si) modules could encounter constraints in 2011.

Further, the company believes that utilization rates for c-Si module production facilities will climb to more than 90% this year, and that many Tier 1 suppliers of c-Si modules and cells will be sold out. Tier 2 and Tier 3 module suppliers now are seeing business pick up as they strive to supply Germany with the modules it needs.

Despite the short-term supply challenges, the outlook for global PV installations remains bright, and by 2011, global PV installations will rise to 20.3GW, nearly triple the 7.0GW in 2009, iSuppli concluded.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved