Craig Stevens, President of Solarbuzz, explains this growth in solar PV demand as a product of improved financing conditions and a rush to beat feed-in tariff cuts in Europe: “The rush to install in Germany ahead of tariff declines in mid-2010, combined with strong incentive programmes across Europe (especially in Italy, France and the Czech Republic) and an improved financing environment, drove the global PV market over three times the level in Q2’09.”
Germany, at 2.30 GW, accounted for 60% of global solar PV demand in Q2’10. The next largest country market was Italy, which grew 127% quarter on quarter, was still just 11% of the size of the German market. France and the US also put in strong performances.
Total solar PV industry revenues were approximately US$17.2 billion in Q2’10, compared to US$12bn in Q1’10 and US$6.2bn in Q2’09.
This growth in solar PV demand means that the solar PV industry remains on target to deliver over 15 GW installations this year and has also led to Solarbuzz raising its five year demand scenario forecasts in its report.
Supply summary
Polysilicon, wafer, and cell manufacturers reached capacity utilisation rates of between 75% and 87%. Despite an increase of 495 MW in wafer supply over the past quarter, wafer capacity represented the most constrained part of the solar PV industry chain.
Among solar cell manufacturer shipments, the top 5 were represented by First Solar, Suntech Power, JA Solar, Yingli Green Energy and Trina Solar. Among the top 12 solar cell manufacturers in Q2’10, 6 Chinese manufacturers accounted for 55% of shipments, up from 43% a year ago.
Both upstream and downstream solar PV module inventories in MW terms held almost perfectly steady at the end of Q2compared to the prior quarter end.
After 6 quarters of declines in factory gate prices, there were modest rises in short term contract prices in Europe.
However, weighted average factory gate solar PV modules prices are still down 24% in US dollar terms from one year ago.
First-tier Chinese solar cell and module manufacturers that had priced competitively in the first 6 months of the year moved in to a forward sold position, which, in turn, allowed European factory gate prices to rise 2-4% by the beginning of Q3’10.
A strong yen is helping to ensure that Japan remains one of the best markets to place product.
Looking ahead
According to the Solarbuzz report, the most challenging quarter is likely to be Q1’11 due to large reductions in solar PV tariffs at the beginning of the year in Germany.
Even with careful phasing of solar PV projects and price reductions, market demand is projected to be less than 50% of module production.
As a result, the analysis forecasts end Q1’11 upstream and downstream solar PV module inventory days to increase significantly by the end of that quarter.