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Module prices to drop 29 percent in 2012

As the global photovoltaic market shifts from Europe to America, China and other parts of the world, The NPD Solarbuzz Marketbuzz report predicts that c-Si module prices will fall by 29 percent in 2012. As this trend continues, module prices should continue to fall by between 43 and 53 percent over the next five years.

While Europe dominated as an end market, Chinese and Taiwanese photovoltaic cell producers extended their production dominance in 2011, capturing 74 percent of the global market.

NPD Solarbuzz

The shift of the photovoltaic market away from Europe is quantified in the report as representing a decline from 68 percent of world demand in 2011, to 53 percent in 2012 and then below 42 percent by 2016. The Chinese market is expected to grow rapidly, accounting for 17 percent of world demand by 2016.

NPD Solarbuzz reports that 2011 was a bumped year for solar. The worldwide photovoltaic market reached 27.4 gigawatts (GW) in 2011, representing growth of 40 percent over the previous year.  Much of the demand, writes the report authors, was due to a surge in demand ahead of feed in tariff (FIT) cuts in key markets.

The top five photovoltaic markets were Germany, Italy, China, the U.S. and France. Together they accounted for 74 percent in global demand.

Industry revenues totaled US$93 billion, up 12 percent, while more than $8 billion was raised in corporate equity and debt.

Production trend

Chinese crystalline silicon wafer, cell and module producers expanded their dominance in 2011, reports NPD Solarbuzz, while the share of thin film declined. Cell production from China and Taiwan accounted for 74 percent of global cell production, up from 63 percent in 2010.

Module price declines were pronounced during the year. During the first six months of 2011, c-Si module prices dropped 28 percent in 2011, 14 percent more than in 2010. Fourth quarter (Q4) prices were down 46 percent from Q4 2010.

"Aggressive cuts in incentives in Germany and other European countries have set up the potential for a global market decline in 2012, but ahead of these the rush to install is on, especially in Germany," said Craig Stevens, President of NPD Solarbuzz in a statement announcing the report’s release.

"These cuts in tariffs will force companies to embrace self-sustaining marketing models earlier than they expected." Stevens continued: "Meanwhile, Chinese policy makers will face a decision whether to stimulate their domestic market even more than planned to support their globally dominant manufacturing base."