Small European markets on the rise

The top five locations by IRR (1Q12) are: Portugal, Cyprus, Hawaii, Greece and Israel.
Portugal’s solar market apparently remains one of the hottest for investors able to develop systems under the country’s installations cap. The financial crisis is indeed looming over the European continent and this could perhaps hinder the market. Nevertheless, Portugal’s IRR for the six major solar technologies remain high.
"Uncertainty surrounding Europe’s financial situation and its countries’ ability to pay out incentives will prevent wild growth – keeping that market relatively constant," says Matt Feinstein, the Lux Research Analyst who led the Demand Forecast. "However, a number of Asian markets have high returns going into 2012 – notably Malaysia at 24.1 percent, the Philippines at 22.6 percent, and Japan at 20.9 percent. They will push demand toward that region in 2012 and 2013."
Remaining in Europe pv magazine asked Feinstein where Germany is headed then with the current political and economic climate within the country and it’s ripple effects onto the continent. Will Portugal and Greece overshadow Germany in terms of PV investments in 2012? Feinstein answers, "While the European financial crisis is a major factor in the solar industry, globally – Germany will remain the largest demand market. IRR simply conveys that systems in Portugal (that are covered in its installations cap) benefit from extremely generous subsidies. Germany’s solar market will fade over time as its energy market is highly saturated by solar, which is an intermittent energy source and can cause problems on the conventional power grid. Germany has already begun to address this with new VDE regulations for solar inverters. As demand fades in Germany, it will not move to other European countries – rather, to Asia and North America".
Spain was a large player in PV before. However, things have crumbled in the Spanish solar sector and the economic and political crisis has hit the country hard. Can Spain get back in the game or is it a lost cause? Feinstein tells pv magazine that he would "like Spain to steadily tick upwards and perhaps become a major player again in 2015." "But even in that case, installed demand and potential returns are limited by the country’s cap on operating hours. While the feed-in tariff remains strong, grid regulations and the wider European crisis could leave it a second-tier market."
The forecaster examines six key technologies: monocrystalline silicon (c-Si), multicrystalline silicon (mc-Si), cadmium telluride (CdTe), copper indium gallium diselenide (CIGS), thin film silicon (TF-Si), and high concentrating photovoltaic modules (HCPV). It provides breakdowns for IRRs for residential, commercial and utility installations in 50 U.S. states, 31 Chinese provinces and semi-autonomous regions, and 75 countries/regions globally.
IRR is the discount rate at which the net present value (NPV) of future cash flows from a capital investment equals zero. Capital expenditure is the primary factor in determining a market’s IRR, along with incentives and operating expenses. Put simply, it provides an apples-to-apples metric for investors to compare demand and project growth for solar across disparate markets.