Global PV inventories reach record levels

IMS Research estimates that for the first time global photovoltaic module inventory levels have reached over 10 gigawatts (GW), in the second quarter of 2011. This is attributed to the halting of the Italian market and a slower start to the year than expected in key markets elsewhere in Europe.

This has impacted all areas of the industry with inventory levels rising across the board for manufacturers, distributors, integrators and installers.

Photovoltaic research Analyst Sam Wilkinson said that despite the record inventory levels, they are in fact within a range that should be considered normal. "Many in the industry consider today’s inventory level to be shocking. However, it represents an increase of only around three to four GW over ‘normal’ levels."

He said that during the period of high demand in 2010, products were moving from manufacture to installation quickly and inventory typically stood at four to five GW.

Most of this record inventory is now in distribution and sales channels – around eight GW – having been shipped from manufacturers. Supplier inventory has also grown quickly in early 2011 with supply far exceeding shipments.

Despite this, IMS Research predicts that this situation is not set to last. In the third quarter of 2011, decreasing module prices should lead to a strong recovery in the photovoltaic market, in particular in the USA and Germany.