The solar market is in for turbulent times.
Sales this year should grow a robust 58 percent to 11.2 GW, recovering from a difficult 2009. And while they should rise modestly again next year, over capacity will push prices sharply lower
This difficult combination will cause sales dollars – and profit margins – to fall.
Weathering this market will be difficult for all but the lowest cost manufacturers, warns an annual market forecast from Greentech Media Research.
Solar market revenue from 2003 to 2013. Source: Greentech Media Research
Here are some observations from the study:
*High electricity prices will make Japan and Italy the first markets to see solar reach cost parity with fossil fuels. Select projects will begin to reach parity in the next three years with widespread cost parity after that.
*German demand for solar energy will peak in 2010 following cuts in the country’s feed-in tariff beginning in July. In 2011, demand will decline to 4 GW from 5.5 GW this year and remain steady through 2013.
*Italy will become the world’s second largest solar market (after Germany) in 2010. Demand of 1.4 GW will be spurred by feed-in tariff cuts planned for 2011.
*Excess manufacturing capacity for solar modules will increase each year through 2013. Excess capacity of more than 6 GW this year will increase to more than 13 GW by then.
*Module pricing will once again come under pressure. After a slight uptick in the first half of 2010, prices will fall in the second half of the year and tumble another 19 percent in 2011. Margins at manufacturers will shrink.
*Thin-film solar cells will make up about a third of the market by 2013 as new technologies – as well as First Solar’s cadmium telluride cells – see expanding demand. Only a few companies will achieve high margin, thin-film production.
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