WORLD SUN INCENTIVES, MARKETS SHIFTING

European Solar Incentive Cuts Initiate Global Photovoltaic Market Shift
June 22, 2011 (SolarBuzz)

"Continued government policy adjustments are causing major shifts in the sizes, growth rates and customer segment mix of photovoltaic (PV) markets in 2011, according to the conclusions of three new Regional Downstream PV Market reports issued by Solarbuzz®…

"…European markets, led by Germany and Italy, have absorbed Feed-In Tariff (FIT) rate cuts of up to one-third between January 1, 2010 and July 1, 2011…[D]emand in Germany, the world’s largest PV market, [collapsed by half]…[O]verall European full year demand is expected to flatten in 2011 after increasing more than 170% from 2009 to 2010. These policy adjustments have particularly hit large ground-mount systems on agricultural land…[I]nvestment returns across the range of residential and commercial roof-mounted installations remained attractive in 1H’11…"

click to enlarge

"…Europe is now projected to represent 65% of world PV demand in 2011, down from 82% in 2010, while the US will grow from 5% to 9%. The top five Asia Pacific markets led by Japan and China accounted for 11% of global demand in 2010, a share that will grow to 16% in 2011…[and] reach at least 26% by 2015… US share rises to 14% by that year…PV project pipelines in the US, China and India collectively now stand at a huge 25 gigawatt (GW)…

"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. Europe benefited from sharply lower prices during 1H’11 which, in particular, helped maintain Italian demand impetus. The avoidance of mid-year FIT reductions in Germany will now aid demand recovery in 2H’11. Chinese module supplier prices in Europe were [at times] as much as 25% below their European and Japanese competitors…"

click to enlarge

"In China, domestic demand more than doubled in 2010, with Ningxia and Jiangsu once again the two largest provincial markets…[T]he utility segment accounted for 49% of the national market. In 2010, China was the second largest market in the Asia Pacific region…[to Japan’s] 111% Y/Y growth… 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 between 1.3-1.5 GW 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…[P]roject developer and direct utility procurement emerged as formidable new channels. In 2011, the US market is projected to reach around 2 GW, growing to as high as 6.4 GW by 2015…"