PV revenues and profits to keep on declining

29. September 2011 | Industry & Suppliers, Markets & Trends, Products | By:  Becky Stuart

Despite an increase in photovoltaic module shipments, revenues and gross profits are forecast to keep on shrinking into next year, according to new research, due to the "huge" oversupply, "fierce" competition and falling prices.

General solar photovoltaic module image against the sky

Photovoltaic module production is expected to be double that of actual market demand.

In its latest quarterly report, IMS Research states that the rapidly declining photovoltaic module prices will see global industry revenues shrink by 10 percent this year, even though shipments are increasing.

This trend is expected to continue into 2012, with revenues of just $30 billion being reaped. This is less than the $38 billion generated in 2010, which experienced record growth of 74 percent from 2009.

While IMS expects that growth will resume in 2013, it says it is unlikely that revenues will return to 2010’s levels until after 2015.

Furthermore, it is estimated that gross profits will fall, from $10.3 billion in 2010 to just over $5 billion in 2012.

The research company goes on to say that module production is expected to be double that of actual market demand, at over 50 gigawatts. "This huge oversupply has driven many suppliers to engage in a price war to win business; and current prices are now 35 percent lower than they were at the end of 2010," it said in a statement.

Senior research analyst, Sam Wilkinson added, "Another significant consequence of declining revenues for the industry will be a sharp decrease in profits. As module prices have fallen much faster than suppliers have been able to reduce their costs, average gross margins are currently half what they were six months ago."

To leave a comment you must first sign in or register your details

No comments

No comments have been submitted yet. Why not login or register and be the first?

Daily newsletter

Keep your finger firmly on the photovoltaic pulse: sign up for our daily newsletter

Magazine subscription

Choose between a digital and print subscription from pv magazine's online shop. A non-subscriber? Check out our sample articles.

Press releases

Want to publish your press releases for free? Simply log in or register, enter the information you want to appear and we'll publish it for you!