By Renewable Energy Focus staff
Europe has been particularly affected, led by Germany and Italy – both of which have reduced their solar PV feed-in tariffs. Overall, Europe has seen feed-in tariff rate cuts of up to a third between January 2010 and July 2011, causing first quarter demand in Germany to drop to below half of that in Q1 2010, the analyst says.
Furthermore, European full year demand for solar PV is expected to flatten in 2011 following its huge growth of 170% from 2009 to 2010. It is especially large ground mounted solar PV systems on agricultural land that has been hit by the policy adjustments.
European demand slips
Solarbuzz says Europe is now projected to represent 65% of world solar PV demand in 2011, down from 82% in 2010. At the same time, 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, and this is expected to grow to 16% in 2011.
The solar PV market share of these Asia Pacific countries is projected to increase steadily to reach at least 26% by 2015, while the US share could rise to 14%.
Solar PV project pipelines in the US, China and India collectively now stand at 25 GW.
“Project development activity is intense in these countries,” says Craig Stevens, President of Solarbuzz. “Successful delivery of these pipelines will first require a host of incentive mechanisms. Regulatory, financing, project structure and permitting issues must be overcome.”
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, the analyst says.
Europe benefited from sharply lower prices during 1H 2011 which, in particular, helped maintain Italian solar PV demand impetus.
The avoidance of mid-year feed-in tariff reductions in Germany could aid demand recovery in 2H 2011.
Chinese module supplier prices in Europe were as much as 25% below their European and Japanese competitors back in Q1 2010, but the discount steadily reduced to a low of only 10% in February 2011. However, it spiked again toward the end of Q2’11.
China solar PV demand doubled in 2010
In China, domestic solar PV demand more than doubled in 2010, with Ningxia and Jiangsu once again the two largest provincial markets, while the utility segment accounted for 49% of the national market.
In 2010, China was the second largest solar PV market in the Asia Pacific region, second only to a rejuvenated Japan whose 111% year on year growth was 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.
Chinese share in US market increasing
In the US, soaring utility demand is redefining end-market, product mix and channels to market for solar PV.
Chinese solar module manufacturer market share increased to 37% in 2010, led by Suntech Power, Trina Solar and Yingli Solar, with their share building again during Q1 2011.
In 2010, distribution channel shipment share saw a small drop to 23%, while project developer and direct utility procurement emerged as formidable new channels. In 2011, the US solar PV market is projected to reach around 2 GW, growing to as high as 6.4 GW by 2015.
“With the US utility segment projected to soar to 54% of the total market in 2012, significant changes in module supplier, inverter manufacturer, project developer, distributor, and system integrator market shares are likely to occur over the next five years,” adds Stevens.