Solarbuzzs latest quarterly report has found that while 2010 saw a 139 percent increase in PV demand, the first quarter of this year – as was predicted at the end of 2010 – has got off to a weak start. It adds that preliminary estimates of the first quarters end-market demand in Germany show it running at less than 50 percent of its quarter one 2010 level.
And, while gradual price reductions have been implemented this year, Solarbuzz says they have been "insufficient in energizing the market". The research company does believe, however, that global demand in the second quarter of this year will reach 7.4 gigawatts, which would represent year on year growth of 77 percent.
Furthermore, Solarbuzz states that total downstream European inventories have "built to unsustainable levels" at the end of this years first quarter. This is also true for the U.S., it says, although to a lesser extent. The reason cited for this is the fact that module manufacturers have reportedly been expanding their sales channels, and taking on a broader range of smaller distributors and brokers.
The company goes on to say that, by the middle of 2011, the top five European markets will see feed-in tariff (FIT) cuts. Already Germany, Italy, the UK and France have made waves this year after either announcing new tariff levels, or plans to cut incentives. As a result, Solarbuzz believes that second quarter demand will be "stimulated by the rush to beat mid-year FIT declines".
It says that there will also be steady growth in other European markets, as well as in the U.S., Canada, China and India.
This year, it adds, module manufacturers are planning to raise shipments by 55 percent, while full-year demand is projected to increase by just 12 percent. In a statement, it says: "After the demand peak in Q211, the industry will face an exceptionally challenging 2H11, as it addresses a supply/demand imbalance. A period of negative production growth will be necessary to avoid excessive inventory build."
Referring to the nuclear disaster in Japan, Solarbuzz believes that any major changes that are be made to government PV policies as a result, will not impact demand until 2012. The statement continues: "At the same time, the disasters impact on the nine major plants engaged in polysilicon, wafer and cell production in Japan so far appear to be minimal."
"2011 will be a challenging year for the industry as it manages a slowdown in the market," explains Craig Stevens, president of Solarbuzz further. "Europe will not be the growth engine it has been in recent years, and manufacturers will need to access new markets or be exposed to the risk of rising inventories or production cuts during a period of falling prices."
The research company concludes by stating that by the fourth quarter of this year, the market share of Chinese, Taiwanese, and other Rest of World (ROW) producers is projected to increase to 74 percent, up from 66 percent in the fourth quarter of 2010.