In its latest Photovoltaics Cell & Module Production Market Tracker report, IHS iSuppli writes that while average market prices are set to ease off for crystalline photovoltaic modules in 2H 2012, declines can still be expected. At the end of June, it reports that prices are 0.64/W. They are expected to fall to 0.57 by the end of the year for Chinese made Tier 1 and 2 modules. The improvement has been attributed to both an increase in installed capacity and high demand for Taiwan cells.
"Despite the persistent overcapacity situation that continues to undermine pricing throughout the entire solar supply chain, the PV market is finally showing some signs of improvement," states the companys Stefan de Haan, a principal analyst for photovoltaics. He adds, "Not only is the outlook on 2012 global installations rising continuously, Taiwanese cell makers in June also reported growing demand. Together these factors are helping to bring some stability and slow the pace of price declines."
While this is good news for some, including vertically integrated module manufacturers, IHS iSuppli says that not everyone will benefit. "Pure play module makers should not count on any strong declines in cell prices," it says.
Meanwhile, the company predicts that overcapacity will continue to "plague" the industry, with global cell production totaling 43.5 GW and module production 49.4 GW in 2012. However, it expects the situation to "noticeably" improve in 2013. "The second half of 2013 could mark the beginning of a new investment cycle in the PV industry," it states.
Installed capacity
In terms of global photovoltaic installations, newly added capacity is expected to grow nine percent on 2011, from 27.8 GW to 30.2 GW. It would even be possible to achieve installations totaling 36 GW, in the "best-case" scenario, adds IHS iSuppli.
In Germany, it says that new installations are predicted to reach 7.3 GW, which although down three percent on 2011, is still much better than many had feared on the back on the recent EEG amendment. This forecast ties in with the Deutsche Banks belief that around 7.5 GW will be installed in the country this year.
In a recent industry note, the Germany-based bank writes that compared to around five GW of demand in 1H 2012, 2H 2012 will see approximately 3.5 GW of new installations. "New orders at distributors for the month of July are down 40%-50% YoY, ~30% Q/Q and this slowdown is expected to continue in Aug as well. Given the potential risk of ~1.8% FIT cut expected from Nov 1, we expect strong demand from Aug-Oct timeframe. That said, IRRs in major segments in Germany are expected to be in the sub-6% range in 2H12 and unlikely to drive significant demand upside relative to current expectations," explain the analysts.
They add that IRRs for the small rooftop photovoltaic market in Germany are expected to remain at between five to six percent, compared to the 10 to 15 percent enjoyed between 2009 and 2011. They continue, "Moreover, the small roof-top segment has historically only supported ~10% of the overall German market and even assuming a robust household penetration, we see this market growing by ~1.4GW annually at best."
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Becky Beetz
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