However, in contrast to the short term photovoltaic installation forecasts, the market researchers have revised down their long term forecasts due to decreased government incentives in several markets.
The IMS figures reveal that global photovoltaic installations will grow by 15 percent in 2011. A surge in demand is also to be expected in developed solar markets such as Germanys. This is as a result of component prices falling rapidly and significantly.
Furthermore, the report notes that certainty returned to the Italian market, after the fourth Conto Energia was signed in to law on May 6. "Life will return to the paralyzed market that was simply waiting and watching in quarter one," it said. The figures demonstrate this paralyses with installations falling 37 percent in the first quarter of 2011, totaling only 3.5 GW. The forecast is for this to increase throughout the year culminating in a "very large" fourth quarter.
Significantly, the IMS forecasts show that the European photovoltaic industry may have to look elsewhere for growth in the future. The forecasts are for photovoltaic demand in Europe to fall in both 2011 and 2012. Researcher for IMS Ash Sharma said that it will be some time before demand recovers to 2010 levels. "Europes share of the PV market will fall considerably in the next three to five years and will not return to the 2010 level for quite some time."
Incentive cuts, in the form of falling rates for feed-in tariffs (FIT) or suspended schemes, are behind Europes sagging demand. "The governments associated with most major markets have either cut incentives recently or indicated that they will do soon," said Sharma. In Germany and Italy alone, demand is expected to fall by three GW in 2012.
Elsewhere, photovoltaic growth is seen to be uncertain with this being reflected in the IMS forecasts. Installations are growing well in both Asia and the USA, with combined installed capacity predicted to exceed five GW in 2011.
Despite its growing influence as a photovoltaic manufacturer, IMS research reports that in China, "market growth will be limited to government-controlled projects." A FIT scheme is not set be introduced for some years as module prices remain too high.
IMS Sharma concludes that development in the field of photovoltaics in 2012 is dependent on industry balancing costs with reduced government incentives in major markets. "Although margins are now being squeezed and prices are beginning to fall, further reductions are needed in 2012 and the key now lies in polysilicon and wafer supply to do this."
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