In its latest quarterly report, IMS Research states that the rapidly declining photovoltaic module prices will see global industry revenues shrink by 10 percent this year, even though shipments are increasing.
This trend is expected to continue into 2012, with revenues of just $30 billion being reaped. This is less than the $38 billion generated in 2010, which experienced record growth of 74 percent from 2009.
While IMS expects that growth will resume in 2013, it says it is unlikely that revenues will return to 2010s levels until after 2015.
Furthermore, it is estimated that gross profits will fall, from $10.3 billion in 2010 to just over $5 billion in 2012.
The research company goes on to say that module production is expected to be double that of actual market demand, at over 50 gigawatts. "This huge oversupply has driven many suppliers to engage in a price war to win business; and current prices are now 35 percent lower than they were at the end of 2010," it said in a statement.
Senior research analyst, Sam Wilkinson added, "Another significant consequence of declining revenues for the industry will be a sharp decrease in profits. As module prices have fallen much faster than suppliers have been able to reduce their costs, average gross margins are currently half what they were six months ago."