WHAT’S COMING FOR PV SUN

2012: Disaster Movie or Will the Romance Continue?
Bettina Weiss, December 2010 (PV Group)

"…Some analysts are beginning to talk about a real 2012 solar energy disaster, as German feed-in tariffs become further reduced or capped…[F]uture German Renewable Energy Sources Act (EEG) revisions due in mid-2011 could lead to a market cap of only 3 GW in 2012 in a “worst case scenario”, reducing world solar demand by a whopping 6.8 GWp, or 37% off anticipated 2011 levels…[This] underscores the risk associated with a global market so dependent on one nation’s political consensus…

"…Germany [accounted ]for 7.2 GW (54%) of the world’s 13.4 GW of the 2010 PV market…[It] dominates the world solar market…[O]nly Italy [had] over 1GW in 2010…[The 2011] non-German solar market—led by Italy, Japan and the US—[will] grow from 6.2 GW to 8.6 GW, a robust 39%…regardless of the anticipated reductions in the German FIT. In 2012, however, all key market areas would have to grow at least 100% from 2010-2012 to sustain global market growth…[because] “Experience Report EEG”, scheduled for publication in mid-2011… will contain recommendations for…a greater reduction in FIT or…a market cap…"

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"The 3 GW market cap scenario is derived from Germany’s National Renewable Energy Action Plan (NREAP) target volume for 2020 of 52 GW…[C]umulated market volume in Germany would be 25 GWp by 2011. For the period to 2020, annual installations of 3 GWp would be sufficient to meet the NREAP target…[M]any analysts do believe that other markets will grow fast enough to offset expected declines in German solar demand…

"GTM Research believes that demand for PV will grow to 15 GW in 2011, 6% higher than 2010, stepping up into 17% to 19% from 2012…[and expects] Germany should still be a 5-GW-plus market in these years, and strong growth in the U.S., Italy, France, Canada, China, and Japan (as well as secondary markets such as Bulgaria and Belgium) will in part make up [the rest]…Barclays Capital US Clean Technology Report…[said] US solar…[will] overtake Germany from 2011…First Solar expects North America to be their largest market in 2011; SunPower expects 40% of their 2011 market volumes to be from the US; and Suntech expects volumes to double in North America in 2011…"

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"…IMS Research expects moderate growth in 2011 and 2012 despite a decline in German PV installations…[with] high demand from GW-sized markets such as Italy and USA…[and] demand from many emerging markets in Eastern Europe and Asia…Deutsche Bank also sees other countries compensating for German market adjustments…Much of the confidence in market growth, even in Germany, is based on likely cost and ASP reductions from leading China-based suppliers…Morgan Stanley sees a significant correction in Germany in 2012, not 2011…

"…[S]upply chain players…[should (1) decrease] costs toward grid parity and full competiveness with current peak and base load energy sources…[(2) Increase] internationalization and PV support activities…[and (3) increase] innovation in the areas of storage, grid, and other complimentary technologies…[but these may] not be sufficient to maintain the PV market above 18-19 GW in 2012 amid radical changes in the German FIT system….[because the US, Japan, India, Canada, Italy, France, Spain and other markets have policy limitations]…[To offset significant] declines in the German PV market…[1] China demand must significantly ramp and the country needs to become a leading consumer as well as supplier…[2] Solar markets need to remain open and local content and other trade restrictions need to be reduced and averted…[3] US policies at both the State and Federal levels need to evolve…to [facilitate] demand levels commensurate with [US] economic and solar resources…[4]The global PV supply chain must reach new levels of international collaboration…"