South, East and over the Atlantic

The U.S. represented only five percent of the world photovoltaic market in 2010, which is predicted to grow to nine percent by the end of 2011. Likewise, the Asia Pacific markets, led by China and Japan, accounted for 11 percent of capacity that will grow to 16 percent by the end of the year. Solarbuzz notes that photovoltaic pipeline in the U.S., China and Japan is now 25 gigawatts (GW).

The report also notes that photovoltaic policy changes in each of the Asia-Pacific markets are occurring with China, India and Australia all initiating on-grid markets. Simultaneously Japan and South Korea are re-stimulating their domestic markets. National and provincial programs are also feeding growth in China, which accounts for 50 percent of photovoltaic module production, which is predicted to expand by up to 174 percent from 2010 to 2011.

At present, residential installations dominant the Asian photovoltaic markets, however Solarbuzz predicts this moving towards utility scale installations in 2011 (see graphic).

Finance remains a challenge in the Asian markets, notes Solarbuzz, however if programs to facilitate this are successful, the gains in these markets will offset the losses in the European markets.

The European picture

Cuts in European feed-in tariffs have been attributed to the turnaround in these markets from growth of 169 percent in 2010 to a contraction of 14 percent this year. Alan Turner, from Solarbuzz, notes Europe’s previously dominant role in the market and how public policy changes are undermining this. Previous growth, he said, "was underpinned by aggressive, uncapped feed-in tariff (FIT) programs that are now being scaled back to reduce costs. Policy adjustments are becoming more frequent, creating uncertainty for investors in PV systems."

The report analyses the effect regulatory changes are having in Italy and Germany while indicating that Solvakia, Bulgaria, Ukraine and U.K. all have potential as smaller markets.

Overall in Europe, Solarbuzz sees incentive structures falling by 17 percent on average, from 2010 to 2011, with commercial rooftop installations falling of 100 kilowatts (kW) falling 23 percent and ground-mounted one megawatt (MW) installations by 34 percent. Small installations in Greece and the U.K. will see the smallest reductions.

The Solarbuzz reports see the impact of these changes as altering the market mix of photovoltaics in Europe. The residential segment will double its share while "investors’ groups" share will fall by almost 50 percent.

Outlook in Europe

Solarbuzz predicts a difficult time for downstream companies with geographical diversification advised. Challlenges lie ahead, predict the report’s authors, before grid parity can stimulate "self sustaining markets".

Energy storage will be focus for utilities, adding to costs, and some predict small-scale residential energy storage offers potential for growth as European incentive structures decline in value.