Goldman Sachs European Clean Energy team report findings showed that, despite lower consensus estimates, these installation figures are attainable when based on its 2010E and 2011E supply forecast of 20 GW and 28 GW respectively.
The findings also showed that the industry should expect to see "a virtuous cycle of falling production costs and module average selling prices (ASPs) to stimulate demand further".
The report stated: "We [Goldman Sachs European Clean Energy team] expect this supply to come from lower cost producers (thin film makers and Chinese crystalline producers, or c-Si, module makers). We think demand may arise where government mandates for increased renewable energy remain strong, finance is readily available, and where domestic and utility scale demand is expected to rise. We expect module production to increase as ASPs decline, enabling PV installation at reasonable internal rate of returns (IRRs)."
Meanwhile, the Goldman Sachs team has said it expects 6.5 GW and 7.5 GW of PV installations in Germany in 2010 and 2011. It says, however, that it sees downside risks to its 2012 estimate of 18 GW to 22 GW and thinks feed-in tariff (FIT) cuts are likely, given the lower ASP trend. The team factors in 15 percent and 12 percent ASP declines in 2H2010E and full year 2011, respectively, for European module prices.
It continues to see attractive solar project IRRs in the German market of above seven percent, and approaching 11 percent when using lower-cost Chinese panels. It thinks the German market remains uncapped and should remain the largest and most important solar market globally for the next two years.
Finally, the report said that although policy is a risk for the solar industry, it is also a driver. It states: Policy incentives such as feed-in tariffs, tax credits and renewable portfolio standards are guiding the industry toward sustainable, subsidy-free markets, though not in an entirely linear, hiccup-free fashion. We think the solar industry is still almost entirely dependent on subsidies. The Goldman Sachs Global Clean Energy team believes the implementation of these incentives will continue to be a source of volatility for the stocks in coming years as the industry weans itself off policy support."
In other news, Solarbuzz forecasts that the global PV market will reach 15.2 GW this year. "Specifically," says the company "the last three quarters of 2010 are projected to generate 12.7 GW, driven by strong growth across Europe, but also in the United States, Japan, China and a range of smaller start-up markets."
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