Consolidation, insolvency, plummeting prices, uncertainty and oversupply are just some of the challenges the global solar industry has faced in 2012. While it has been a tough year for most, IHS is confident the situation will improve, even if some of the watchwords of the last 12 months linger on the industrys lips in 2013.
Overall, the IHS solar research team believes consolidation will continue to wreak its havoc on industry players in 2013. It states that from 750 in 2010, less than 150 upstream companies will remain by the end of this year, and that many integrated companies, particularly in China, face closure next year.
Falling prices will also continue to plague the industry, meaning that while new photovoltaic installations are expected to achieve double digit growth, market revenues will decrease, from US$94 billion in 2011 and $77 billion in 2012, to $75 billion. Both lower installation activity and system price declines have been cited as the main reasons.
Despite this, photovoltaic module prices are expected to stabilize in 2H 2013, as the demand-supply imbalance is corrected. "Changes in market dynamics will help restore the global supply-demand balance," wrote the team.
In terms of markets, at over 6 GW, it predicts that China will emerge as the world solar leader in terms of newly installed capacity in 2013 something that was also anticipated at this years Intersolar China conference in Beijing thus overtaking Germany in 2012 and Italy in 2011.
Meanwhile, in the U.S. it is believed that the solar industry will overtake wind in 2013, again in terms of newly added capacity. "This is partly a result of the near-term uncertainty over the federal production tax credit for wind. However, it is also a reflection of solar PVs increasing competitiveness as a form of renewable power generation in some key U.S. markets," explains the team.
While Europes solar dominance has been on the wane for the past couple years, IHS says European photovoltaic projects could reach double digit returns next year, due to the various subsidy schemes in place. "Meanwhile, an evaluation of no-incentive scenarios shows that the most mature market segments are on the cusp of grid parity, allowing healthy returns on investment," add the analysts.
Perhaps somewhat surprisingly, South Africa and Romania are set to become the emerging "PV markets to watch" as they grow from virtual non-entities in the solar sphere to a situation where several hundreds of MWs are likely to be added. The change is said to be driven by the tender scheme in South Africa and Romanias green certificate scheme.
Looking at equipment and technology, HIS predicts that storage and battery technology will help to drive the solar industry. It forecasts that 2013 will see an increased number of residential photovoltaic systems installed with batteries. Meanwhile, improvements in equipment technologies will help to reduce costs further and improve revenues.
Finally, the analysts forecast the continuation of the solar trade wars of which there are six currently being waged. "This cycle of sanction and retaliation will not help solve the fundamental challenge of overcapacity plaguing the global PV industry," say the analysts.
"The photovoltaic industry is in the midst of wrenching change buffeted by government incentive cuts and nose-diving prices that has hurt solar suppliers worldwide, rocked by trade disputes among its major players, and hamstrung by a sputtering global economy," summarizes Ash Sharma, director, solar research at IHS.
"However," he concludes, "there are some bright spots ahead: Solar installations are on the rise, technology is becoming more efficient, and a weak EU market roiled by financial turmoil will be offset by an ascendant China and the United States."