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Demand increase for solar module regulates price decline trend

Posted: 23 Jul 2012 ?? ?Print Version ?Bookmark and Share

Keywords:solar module? photovoltaic module? solar?

To break the dropping sale trends for photovoltaic modules, price declines are forecasted to slightly moderate in 2H2012 because of renewed demand. Such estimate from a report by HIS entitled "iSuppli Photovoltaics Cell & Module Production Market Tracker" is considered to be a change in the monotony of the struggling solar industry.

The average market pricing for crystalline solar modules dropped by 20 percent in 2H2011 and eased to a 12 percent plunge in 1H2012. The decrease will slightly curb by 11 percent in the second half of this year.

"Despite the persistent overcapacity situation that continues to undermine pricing throughout the entire solar supply chain, the PV market is finally showing some signs of improvement," said principal analyst, photovoltaics for IHS Stefan de Haan. "Not only is the outlook on 2012 global installations rising continuously, Taiwanese cell makers in June also reported growing demand. Together these factors are helping to bring some stability and slow the pace of price declines."

Global installations of PV solar systems are expected to grow from 27.8GW in 2011 to 30.2GW in 2012, according to the IHS iSuppli PV Service.

Demand in Germany is expected to amount to 7.3GW worth of new installations. Despite a 3 percent dive in German installations from 2011 to 2012, the drop was not as severe as expected.

"Recent developments indicate that the German PV market is weaning itself from subsidies more quickly than many had expected," de Haan said. "Supermarket chains in the country have begun to invest in PV systems, with the clear goal of generating electricity for self-consumption. In some of these projects, the cost savings from solar energy are already replacing the FIT as the justification for investment in PV systems."

Market expectations are seen to improve because of the price decline moderation. However, the overcapacity situation still serves as a threat to the industry.

Total operational module production capacity is projected to reach 49.4GW and cell production capacity will equal 43.5GW C both far exceeding the 30.2GW worth of expected global installations for 2012.

IHS expects the stabilization of the overcapacity situation in 2013 because of the current consolidation process and the significant upside potential in global demand. In 2013, the second half is anticipated to herald the beginning of a new investment cycle in the PV industry.

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