Solarbuzz expects major shift in solar PV markets as pipeline outside Europe reaches 25GW

Sept. 20, 2011 - Mark Osborne - pv-tech.org

The photovoltaics market is expected to shift away from Europe and be dominated by installations in new emerging markets such as the US, China, India and other Asia-Pacific countries, according to three new ‘Regional Downstream PV Market’ reports issued by market research firm, Solarbuzz. Due to revised feed-in tariff systems in key European markets, Europe is now projected to represent 65% of world PV demand in 2011, down from 82% in 2010.

Emerging markets such as the US will grow from 5% to 9% of PV installations in 2011. The top five Asia-Pacific markets led by Japan and China had accounted for 11% of global demand in 2010, but the share is set to increase that figure to 16% in 2011.

“Project development activity is intense in these countries,” said 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.”

According to the reports, Europe is still a key market as it benefitted from fast declining prices during the first half of the year. Furthermore, recovery in demand is set to be fuelled by the avoidance of mid-year FiT reductions in Germany.

However, with the German and Italian markets collapsing in the first half of the year, demand in Europe is expected to flatten in 2011 after increasing more than 170% from 2009 to 2010.

Solarbuzz noted that Chinese module supplier prices in Europe were as much as 25% below their European and Japanese competitors back in the first quarter of 2010. By February 2011, the discount had shrunk to a low of only 10%. This trend has now started to reverse, with tangible data expected by the end of the second quarter.

US market dynamics

Solarbuzz said that growth in utility-scale projects in the US was redefining end-market, product mix and channels to market. Chinese module manufacturer market share increased to 37% in 2010, led by Suntech Power, Trina Solar and Yingli Solar, with their share building again during the first quarter of 2011.

In 2010, distribution channel shipment share saw a small drop to 23%, while project developer and direct utility procurement emerged. Solarbuzz expects the US market to reach around 2GW in installations in 2011, growing to as high as 6.4GW 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,” added Stevens.

China and Japan PV demand

The market research firm noted that domestic demand in China more than doubled in 2010, with Ningxia and Jiangsu being the two largest provincial markets. The utility segment accounted for 49% of the national market.

In 2010, China was the second largest market in the Asia Pacific region, second only to Japan. With 111% Y/Y growth, Japan's residential demand now accounts for 82% of the country's installations.

Solarbuzz expects the Japanese market to grow to between 1.3-1.5 GW in 2011.