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Supply could be twice demand for solar PV in 2010

The output of the global solar PV industry is expected to grow an astonishing 72% in 2008 and in 2009. In 2010, forecasts suggest that supply could be twice the demand predicted in the global PV market. These results were presented at the Global PV Demand expert conference last week in Valencia, Spain.

By Edwin Koot, SolarPlaza

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Print October 13, 2008, 17:41 (CEST)
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Supply could be twice demand for solar PV in 2010

Supply could be twice demand for solar PV in 2010

VALENCIA, Spain and ROTTERDAM, The Netherlands, 11 September The output of the global solar PV industry is expected to grow an astonishing 72% in 2008 and in 2009. In 2010, forecasts suggest that supply could be twice the demand predicted in the global PV market. These results were presented at the Global PV Demand expert conference last week in Valencia, Spain. This potential imbalance could engender price changes and a consolidation phase in the industry in the coming years. Almost 100 experts present responded to a survey at this expert conference organized by SolarPlaza.

 

According to Professor Travis Bradford of the Prometheus Institute, the PV industry will experience steep growth in the production of cells and modules until 2012. In the conservative scenario presented, the supply of crystalline and thin-film modules could reach almost 15 GigaWatt in 2010 and 23.7 GW in 2012, up from 3.1 GigaWatt in 2007. According to a survey of the experts at the conference organized by SolarPlaza, this supply figure for 2010 is almost double that of the forecasted global demand of 7.5 GW. Although the growth in demand is still impressive, the discrepancy between supply and demand is likely to lead to module price decreases and industry consolidation. According to Edwin Koot, CEO of organizer SolarPlaza, global demand could reach 40 GWp per year by 2018. This tenfold growth within 10 years is based on a conservative scenario in which grid parity will be reached by around 2012 in a number of markets. This means that electricity from solar systems will be available at a price equal to grey electricity from the grid. However, in the meantime, uncertainties and changes in government support programs in Germany, Spain and the USA could lead to a turbulent phase until 2012.

 

Experts from the world's major markets presented their current and forecasted market demand figures. Germany will be lowering its tariff for solar electricity generated by around 9% per year from next January. Nevertheless, the experts participating in the survey were confident that the German PV market will continue to grow by at least 20% per year. The world's second-largest market Spain is waiting for a new feed-in tariff scheme. This new tariff and possible market cap in Spain will be crucial for continued rapid growth in the Spanish and global solar PV markets. Currently the government is proposing a 35% decrease in the tariff and a market cap of 300 MWp per year in 2009. This would lead to a 75% reduction in installed capacity for Spain in 2009. In the USA, a continuation of the tax credit support scheme for 2009 has still not been made official. For the long term, beyond 2010, the prospects are quite good, due to a number of project initiatives of several hundred MWp by energy utilities. Two weeks ago the Greek government announced a decrease in its generous feed-in tariff. The government intends to smooth the process via other measures, and by getting projects up and running. The market in Greece is very promising but still small, with 20-25 MWp forecasted in 2008, growing tenfold by 2010. The Italian market could reach 200 MWp of new installed capacity in 2008. Although southern Italy is much sunnier, up to now most systems have been built in the richer north of the country. Further steep growth is expected to 2010. In Japan a new subsidy program in 2009 may lead to a new swing in market demand. Last year, market size decreased 27% to 210 MWp. Last July, the government set a new target of 14 GW of PV for 2020. Emerging market France is expected to reach between 120 and 150 MWp in 2008. This figure is likely to rise in 2009 and beyond.

 

The experts participating in the conference forecasted growth of 34% on average in total global PV demand for 2008 to 2011. The conclusion is that this growth will not keep pace with growth in the supply side of the industry, which will be even more spectacular. The imbalance between supply and demand will inevitably lead to price decreases in the supply chain and a consolidation phase throughout the industry. The experts expect this to happen in 2009.

 

In 2009 SolarPlaza will be organizing another Global PV Demand Conference in Hamburg (Germany). For further information, go to: www.solarplaza.com or www.globaldemandconference.com .

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