9 March 2011


IMS Research: USA and China likely to become the worlds largest PV markets before 2015

What are your expectations for the global PV market in 2011 to 2012 (in terms of new GWs)?
IMS Research estimates that global installations will increase by around 20% in 2011, to between 20-22 GW; however, this is very dependent on how the market reacts to the changes in France and Italy. It’s possible we see a big pull-forward in demand again, but also possible that demand stalls and prices come down rapidly. Inventive reductions during, and at the end of 2011 mean that installations are likely to be roughly flat in 2012.

What do you expect to be the leading PV markets in the coming years?
We forecast that the largest PV markets (in terms of installations) in the next four to five years will be USA, China and Germany. Generally we see the global market diversifying and becoming less depending on just one or two markets – which of course will help stabilise demand.

What are your forecasts for the German and Italian PV market? And what other European PV markets will play a dominant role till 2015?
Following what has been an incredible two years for the German market, with installations estimated to have reached around 7.5 GW in 2010, we are seeing the incentive reductions start to take effect, and predict that installations will begin to decline in 2011, and again in 2012. That said, we don’t see Germany disappearing off the map or crashing altogether and believe that it will continue to install significant amounts of PV over the coming years.

It is currently very difficult to make a solid forecast for installations in Italy, as new information regarding its feed-in tariff is being released all the time. Based on the shipment information that we have collected (from inverter and module suppliers), we believe that genuine completed installations in 2010 were between 3-3.5 GW. We predict that there will be a surge in installations until the end of May when the current feed-in tariffs will finish. Currently, the rates that will be offered after this date are not available and there is still a chance that annual installations will be capped. Until this information is confirmed, it is very difficult to make a forecast. Although, it is certain that the new incentives policy will be designed to reduce the installations. 

The Chinese PV industry is growing tremendously. Not only are the existing giants expanding their capacity, new entrants with huge ambitions are still entering the market. How does this match with the global market growth?
Chinese suppliers are carrying out extremely aggressive expansion plans. Chinese module suppliers added capacity very quickly throughout 2010 and capacity in China at the end of the year was over 80% higher than it was at the end of 2009. This growth was roughly in line with total industry demand. However, 2011 looks a little different; aggressive capacity expansions are continuing and Chinese suppliers are forecast to add a similar amount in 2011, but in contrast to 2010, installations are not predicted to grow at the same rate.

It is also significant that a number of other large Asian electronics suppliers are entering the market. Companies like LG, Samsung and Taiwan Semiconductor are able and willing to spend large amounts of capital and plan to quickly add capacity over the next few years.

What will the solar industry look like in five years’ time? Isn't the solar industry likely to follow the wind-energy industry in the near future, with more than 90% of the market shared among only ten major manufacturers?
With incentive levels in the largest markets being quickly reduced over the last year or so, and further reductions likely, there will certainly be increased pressure on PV module prices. The leading, and surviving, companies will therefore be those that are able to reduce their costs in order to offer attractive prices whilst still maintaining a healthy margin. It is likely than only a small number of the hundreds of suppliers active in the market today will be able to achieve this.

Where in the supply chain (silicon to module) do you see the highest potential for further cost reductions?
As I previously mentioned, cost reduction is key to companies in a market that is ultimately aiming to reduce prices to the point where it no longer relies on subsidies and incentives, and can compete with conventional energy sources.

On the crystalline side, a clear strategy of some of the larger suppliers is the move to vertical integration. It is not difficult to see that the cost structure of a fully integrated module supplier (manufacturing polysilicon, wafers, cells and modules in house) has the potential to be significantly lower than a non-integrated one. A non-integrated module supplier’s cost structure could include the margin of a cell supplier, a wafer supplier and a polysilicon supplier, as well as the extra transportation costs etc. involved with the purchase of each item.

What module price development do you expect this and next year? Will the ASP for c-Si modules hit €1/Wp in 2012?
Following some increases in price during the second half of 2010, due to the high demand and short supply of modules, IMS Research predicts that prices will begin to fall again throughout 2011 and 2012. We predict that some crystalline modules will reach the €1/W milestone during 2012. Some thin film modules will reach this price this year though.

Europe seems to focus more on residential PV applications with their FiT support mechanisms. In the USA on the other hand, utility scale projects seem to drive the market. What is your view on the market segments that will drive the demand in the coming years?
IMS Research predicts that utility-scale PV systems will represent an increasing proportion of installations over the coming years, for a number of reasons:

Firstly, some of the largest markets in a few years time will be ones that favour large utility-scale projects, such as China and USA.

Secondly, the high volume nature of large utility-scale plants once again leads to lower prices and costs, on a per watt or per kWh basis at least.

In your opinion, where will the solar industry and markets be in 2015?
We predict that the largest end markets (geographically) will be USA, Germany and China in 2015. However, as I mentioned earlier we see full vertical integration becoming more and more common in the market, and we are likely to see a number of cell, module and wafer suppliers becoming their own ‘end customer’ and increasingly being involved in developing systems themselves.

Stay on top of the global solar market by joining one of our upcoming events.