Poor PV demand and declining European share set to continue into 2012

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Ahead of the Jeffries Annual Cleantech Conference, scheduled to be held from February 22 to 23 2012, in New York, the analysts have released their market predictions for photovoltaics for the coming year.

While they expect a "mostly somber read-through" on overall demand in the short-term, the Chinese market is looking relatively upbeat. Meanwhile, there are indications that pricing has yet to bottom. "While 4Q volumes may have been better than expected for tier one OEMs [original equipment manufacturers], pricing was dismal and demand is anemic for 1Q," state the analysts.

Specifically, they say that although demand in both Asia and China is optimistic in the long-term, there are "very real near-term demand concerns" for the first half (1H) and full year (FY) 2012. They go onto say that Tier 1 Chinese module manufacturers like Suntech, Yingli, Trina and Canadian Solar, may have higher Q4 utilization on share gains than "less bankable" Tier 2 manufacturers. However, Q1 uptake is said to be "soft".

Falling installations

Meanwhile, the analysts say that an upswing in demand in Germany has been abated by cold weather, and that it is likely subsidy cuts could be introduced in the country by April 1. Coupled with the expected political "pull-back" in Italy, and many companies are of the opinion that 2012 industry volumes will be flat. "In 2012, we expect both Germany and Italy will materially lower subsidies for solar, which will result in substantial volume declines," says Jefferies.

Consequently, the analysts expect that just 10.2 gigawatts (GW) of photovoltaics will be added to the European grid in 2012, compared to the 17.5 GW added in 2011 (according to EPIA, nearly 21 GW was installed in Europe in 2011). This would mean the European market will decline by 42 percent this year, thus serving to represent 43 percent of the global photovoltaics market.

As has been reported many times, both Asia and other emerging markets will counteract this decline. Specifically, says Jefferies, Asia will grow 67 percent this year, to add seven GW to its grid, while the U.S. market will grow 97 percent to add 4.4 GW. However, "total … [worldwide] demand will decline 10 percent to 21.GW mostly due to anticipated decline in top two markets Germany and Italy," say the analysts.

Ending on a positive note, they forecast that 2013 will likely see a renewal in demand, revenue and earnings growth. This echoes chief marketing officer for JinkoSolar, Arturo Herrero’s belief that the next solar boom "will definitely be seen in 2013".

Energy storage

In related news, the Jefferies analysts say that the battery and energy storage industry is "in the midst of a radical transformation as advances in technology and new applications, including vehicle electrification, renewable energy storage, and grid stabilization drive growth."

Energy storage is set to be one of the biggest themes for the photovoltaics industry this year. To address the growing need for solutions, Solarpraxis will hold its first "Energy Storage – Summit for the Storage of Renewable Energies" conference, in Düsseldorf this March 13 and 14.