PV installs poised for 2011 growth — but whither Germany?

PV market analysts debate the strength of the PV sector in 2011, and specifically the uncertainty over Germany’s FiT plans.

October 7, 2010 – PV market analysts debate the strength of the PV sector in 2011, and specifically the uncertainty over Germany’s FiT plans.

Global PV installations are on pace for nearly 50% growth in 2011 to 20GW, though that’s a far cry from the nearly 100% surge seen in 2010, according to new data from iSuppli. Blame uneasy uncertainties over subsidies and FiTs, anticipated softening of end-user demand in 1Q11, and resulting weak prices — which in turn will spur demand in 2Q11, and then a price rebound in 2H11.

No surprise that Germany accounts for half the total installations in 2011 (9.5GW), by iSuppli’s count, even with speculation of a coming PV installation cap. Germany’s PV installations grew 327% to 4.8GW for this year through August — 3GW of that in 2Q10 alone, according to IMS Research — with demand across the spectrum, for small ≤100kW commercial systems (280%), residential installs (140%), and large (≥500kW) commercial systems (500%).

Germany PV registrations by installation type. (Source: IMS Research)



But there is real uncertainty in Germany’s 2011 PV prospects. Demand will likely still be brisk given the inevitability of a large FiT cut in 2012, writes Ash Sharma, IMS’s PV research director. But only a single cut is planned for the end of 2011, so look for the market to cool off near-term — just as production capacity is “massively ramped up,” creating overcapacity that will in turn lead to big price declines through the supply chain, delaying purchases and denting sales and profits, he warns.

iSuppli’s Stefan de Haan, senior analyst for photovoltaic materials and systems, thinks the German government “will not dare to cut down PV subsidies” and risk further alienating public opinion after just pushing through an unpopular extension in nuclear power plant operations. “A severe action such as an installation cap on solar technology conceivably could cause a mutiny among regional German politicians who count PV companies as electoral constituencies, in the process drawing loud protestations from the industry, where precious jobs are at stake,” he says. And in Germany the solar industry has significant political pull — unlike, say, in France, which managed to push through an ad hoc action imposing PV caps, he notes. With polls suggesting an overwhelming 80% voter support favoring renewable energy generation, strong support for and growth of Germany’s PV industry should remain unchanged.

Global PV systems installation by region. *Asia includes China, Japan, Korea; North America includes Ontario and USA; Europe includes Belgium, Bulgaria, Czech Republic, France, Greece, Italy, Spain, and the UK. (Source: iSuppli)

 

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