Shifting PV markets in the US, Europe, and Asia/India

Photovoltaics markets are inextricably linked to government policy in 2011, notes analyst firm Solarbuzz.

June 22, 2011 — Photovoltaics markets are inextricably linked to government policy in 2011, notes analyst firm Solarbuzz. In 3 new Regional Downstream PV Market reports, Solarbuzz notes the changes in photovoltaics market sizes, growth rates, and customer segment mix tied to government policies.

Europe will represent 65% of world PV demand in 2011, down from 82% in 2010, while the US will grow from 5% to 9%. The top 5 Asia-Pacific markets, led by Japan and China, will make up 16% of global demand in 2011, up from 11% last year. The market share of these Asia Pacific countries is projected to increase steadily to reach at least 26% by 2015, while the US share rises to 14% by that year.

Figure 1. Global photovoltaic demand share in 2010 and 2015 forecast. SOURCE: Solarbuzz Regional Downstream PV Market.

European markets, led by Germany and Italy, suffered feed-in tariff (FIT) rate cuts of up to one-third since January 1, 2010, stiffling large ground-mount systems on agricultural land in particular. Germany’s Q1 2011 demand collapsed, bringing the world’s biggest PV market down to less than half of its Q1 2010 size. Europe benefited from sharply lower prices during 1H 2011 which, in particular, helped maintain Italian demand impetus. The avoidance of mid-year FIT reductions in Germany will now aid demand recovery in 2H 2011. Investment returns on residential and commercial roof-mounted installations remained attractive in 1H 2011, but end-customers did not start to respond to fast-falling prices until June. Overall, European full-year demand is expected to flatten in 2011 after increasing more than 170% from 2009 to 2010.

European distribution margins held up better than expected during 2010 and early 2011, as project margins collapsed, causing a refocusing of business models and channels to market. Chinese module supplier prices in Europe were as much as 25% below their European and Japanese competitors back in Q1 2010. This discount steadily reduced to a low of only 10% in February 2011. However, it spiked again toward the end of Q2 2011.

In contrast to the European challenges, PV project pipelines in the US, China and India collectively now stand at 25GW. “Project development activity is intense in these countries,” said Craig Stevens, president of Solarbuzz, pointing out that regulatory, financing, project structure, and permitting choices will be vital to the PV pipeline.

In China, domestic demand more than doubled in 2010, with Ningxia and Jiangsu once again the two largest provincial markets, while the utility segment accounted for 49% of the national market. In 2010, China was the second largest market in the Asia Pacific region, second only to a rejuvenated Japan, whose 111% Y/Y growth was driven by residential demand, accounting for 82% of the market. Strong solar policy support already in place before the Fukushima nuclear disaster indicates that the Japanese market is projected to grow to 1.3-1.5GW in 2011.

In the US, soaring utility demand is redefining end-market, product mix and channels to market. Chinese module manufacturer market share increased to 37% in 2010, led by Suntech Power, Trina Solar and Yingli Solar, with their share building again during Q1 2011. In 2010, distribution channel shipment share saw a small drop to 23%, while project developer and direct utility procurement emerged as formidable new channels. In 2011, the US market is projected to reach around 2GW, growing to as high as 6.4GW by 2015.

“With the US utility segment projected to soar to 54% of the total market in 2012, significant changes in module supplier, inverter manufacturer, project developer, distributor, and system integrator market shares are likely to occur over the next five years,” added Stevens.

To learn more about the European PV Market 2011, United States PV Market 2011 and Major Asia/Pacific Markets 2011 reports, contact Solarbuzz at Solarbuzz, part of The NPD Group, is a globally recognized market research business focused on solar energy and photovoltaic industries.

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