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The global PV market: fasten your seatbelts

Analysis of market demand to 2010.


Edwin Koot - SolarPlaza - July 2008. This report, created by SolarPlaza, looks at the developments in the worldwide PV market. It is merely an attempt to comprehend the developments in the PV market and industry, to outline the likely consequences, and, where possible, to quantify what could happen if SolarPlaza’s analysis is correct. If the source is quoted, extracts from this report may be used and copied.
Publisher: SolarPlaza

Published: July 1, 2008
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Oversupply will start new and dynamic phase in rapidly growing solar industry. The worldwide market for solar (PV) energy and the PV industry itself have grown substantially in 2007 and early 2008. However, growth in the production of solar panels appears to have outpaced growth in the demand side of the market. This could lead to an oversupply situation. 

Growth in the worldwide demand for solar panels is still entirely dependent on, and limited by, local subsidy programmes. In various countries new subsidy programmes are commencing, but in the largest markets contributions are being cut back. 2008 could therefore be a turning point and a crucial year for the development of the international PV market and industry. 

The current developments look like the famous 'hog cycle' scenario: the rapidly growing (world) market has attracted many new producers. This could create an oversupply situation, leading to falling prices and "left">consolidation in the market and further expansion. 

Therefore, a surplus supply of solar panels in the next few years to 2010 could lead to considerable price reductions and a consolidation in the PV industry. This makes the next few years a crucial period, but also a prelude to a new era after 2010, in which grid parity will be reached in a growing number of market segments. This means that the cost per kWh of solar power for private individuals, for example, will be competitive with kWh from the grid. 

From that moment on, the PV industry will be heading towards rapidly growing demand once again, which will no longer be dependent on and limited by subsidy programmes. This could lead to unprecedented growth opportunities for the PV industry and perhaps even an undersupply situation.