"The PV industry has been suffering from a significant imbalance between supply and demand for over 18 months, causing severe price erosion and reducing corporate margins," said NPD Solarbuzz analyst Michael Barker, in a statement announcing the report. "However, confidence in strong market demand during second half of 2012 (2H12) will provide PV market leaders with increased visibility ahead of 2013 strategic planning."
NPD Solarbuzz anticipates that the pick up in demand will come largely from growth in the Asia Pacific regions and especially China. The analysts predict newly installed capacity in China for 2012 to exceed five GW. This, the report claims, will more than offset a drop off in demand from the U.S. based on newly-imposed tariffs against Chinese cell and module manufacturers.
In anticipation of the fouth quarter (Q4) "surge" of installations, downstream integrators are expected to restock inventories in the third quarter (Q3) of 2012.
Despite supply and demand approaching equilibrium, NPD Solarbuzz also expects that module processing costs will be the major target for cost reductions within the crystalline silicon module (c-Si) producers. While polysilicon prices are expected to come down by less than ten percent in 2H12, c-Si module prices are expected to decline by more than 25 to 40 percent.
The company further forecasts that "leading Chinese c-Si producers" will be able to achieve cost reductions by over 40 percent, with the largest part of the reduction coming from the "non silicon" part of production.