It added that the industry is on target to deliver over 15 GW of installations this year. "The rush to install in Germany ahead of tariff declines in mid-2010, combined with strong incentive programs across Europe – especially in Italy, France and the Czech Republic – and an improved financing environment, drove the global PV market over three times the level in Q2'09," noted Craig Stevens, president of Solarbuzz.
According to the latest edition of the Solarbuzz Quarterly, Q2'10 global market demand was only two percent less than the global market's previous quarterly peak (3.92 GW in Q4'09). As a result of this years performance to date, the research company also raised its five year demand scenario forecasts in the report. Total industry revenues were approximately USD$17.2 billion in Q2'10, compared to USD$12.0 billion in Q1'10 and USD$6.2 billion in Q2'09.
Germany, at 2.30 GW, accounted for 60 percent of global demand in Q2'10, said the company. The next largest country market, Italy, which reportedly grew 127 percent quarter on quarter, was still just 11 percent of the size of the German market. France and the U.S. also put in "strong performances".
On the supply side, polysilicon, wafer, and cell manufacturers were said to have reached capacity utilization rates of between 75 percent and 87 percent. Despite an increase of 495 megawatts (MW) in wafer supply over the past quarter, wafer capacity represented the most constrained part of the industry chain, continued the company.
Among cell manufacturer shipments, it said the top five were represented by First Solar, Suntech Power, JA Solar, Yingli Green Energy and finally Trina Solar. It added that among the top 12 cell manufacturers in Q2'10, six Chinese manufacturers accounted for 55 percent of shipments, up from 43 perecnt a year ago.
Both upstream and downstream module inventories in MW terms held "almost perfectly steady" at the end of Q2, compared to the prior quarter end.
After six quarters of declines in factory gate prices, there were said to be modest rises in short term contract prices in Europe. However, weighted average factory gate modules prices are still reportedly down 24 percent in U.S. dollar terms from one year ago.
Solarbuzz went on to say that first-tier Chinese cell and module manufacturers that had priced competitively in the first six months of the year moved in to a forward sold position, which, in turn, allowed European factory gate prices to rise 2-4 percent by the beginning of Q3'10. A strong yen was attributed to helping to ensure that Japan remains one of the best markets to place product.
Looking ahead into 2011, the most challenging quarter will "undoubtedly" be Q1'11. Leading European markets, including Germany will face large reductions in tariffs at the beginning of the year, explained the research company. It said that even with careful phasing of projects and price reductions, market demand is projected to be less than 50 percent of module production. As a result, the analysis forecasts end Q1'11 upstream and downstream module inventory days to increase "significantly" by the end of that quarter.
"Historically, the PV industry has often exuded over-optimism in the face of uncertain end-markets. However, the recent industry conference in Valencia confirmed two prevailing industry positions, one that emphasizes oversubscribed order books, the other that focuses on the German tariff declines and a demand reduction next year," Stevens concluded.
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