Analyst: FiTs, PV supply rodeo define PV’s 2010, 2011

Global solar installations will nearly double in 2010 to 13.6GW, far beyond initial expectations of 64% growth to 8.3G, followed by more growth in 2011, but it won’t be quite a smooth ride for the industry according to iSuppli.

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Global PV installations (GW). Source: iSuppli
April 23, 2010 – Global solar installations will nearly double in 2010 to 13.6GW, far beyond initial expectations of 64% growth to 8.3G, followed by more growth in 2011, but it won’t be quite a smooth ride for the industry, according to iSuppli.

Henning Wicht, director and principal analyst for PV at iSuppli, sees 2010 shaping up to be “an up and down year” as the industry struggles to balance supply and demand, trying to “figure out how much is needed, where it is needed and when is it needed.” Solar panel price declines in 2009 “are now being reflected in system prices,” he says, which will compensate for the coming German FIT reductions in July, so returns-on-investment (ROI) are still attractive, and could exceed 10% in some cases. Look for periods of supply constraints/shortages in materials, inverters, and maybe panels, which could hinder growth somewhat, he projects.

Here’s how he sees 2010 panning out:

  • First quarter: Slow due to lousy winter conditions. Installations decline from 4Q09.
  • Second quarter: “A blockbuster for the global PV industry.” Rush to install PV systems under the current incentives, before Germany reduces its feed-in tariff (FIT) in July.
  • Third quarter: Market correction
  • Fourth quarter: Another “huge quarter” ahead of other national FIT changes due in Jan. 2011.

The story continues in 2011, with expectations of more eye-popping growth (nearly 50% to 20.3GW), but also more supply headaches. Factory utilization rates for crystalline silicon (c-Si) modules will climb to >90% in 2010, with many Tier 1 firms (both modules and cells) sold out; Tier 2 and 3 module suppliers are already seeing a pickup in business relative to brisk demand in Germany.

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