Sudden German PV buying spree strains PV suppliers

Germany’s orders for new photovoltaic (PV) solar systems will spike in October and November 2011, before falling off in a lower-tariff 2012, according to the IHS iSuppli Photovoltaic Service. Not all PV module suppliers willl be able to move fast enough to capitalize on the buying spree.

October 6, 2011 — Following a July/August slump, Germany’s orders for new photovoltaic (PV) solar systems will spike in October and November 2011, before falling off in a lower-tariff 2012, according to the IHS iSuppli Photovoltaic Service.

Germany’s feed-in tariffs will drop 15% next year, making solar installations more costly. IHS believes that this is driving the year-end scramble for new installs locked in at the higher FIT. But the uptick in short-term German demand could strain major PV suppliers.

Whereas Germany will install 5.9GW of solar power in 2011, the country will see only 5.0GW installed in 2012.

The pre-tariff-cuts buying spree was delayed by buyers waiting for the best price, as PV module prices tumbled throughout 2011. Buyers delayed orders, creating the July/August slump (along with the effect of seasonal vacations).

Major solar module suppliers, most in China, are not designed to handle this kind of compressed buying cycle. Factory utilization rates are down on weak demand, said Dr. Henning Wicht, senior director and principal analyst for IHS. Not all suppliers will be able to ramp production in time to capitalize on Germany’s shopping season. Consider the 6-week delivery time, adds Wicht.

First- and second-tier module manufacturers closely linked to wholesalers in Germany should be able to react to the rise in demand quickly and fulfill the additional orders. However, less known module companies selling on the spot market may face difficulties in meeting orders.

For more on this topic, see IHS iSuppli Photovoltaics: http://www.isuppli.com/Photovoltaics/Pages/Headlines.aspx?PRX

Germany is the world?s largest PV installation market. See a geographical breakdown of solar markets here.  Best return on investment regions here.

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