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PV demand from APAC to grow by 80% YoY in H2

Posted: 31 Aug 2012 ?? ?Print Version ?Bookmark and Share

Keywords:PV demand? APAC? NPD? Feed-In Tariff? Renewable Portfolio Standard?

According to NPD Solarbuzz, PV demand from the Asia Pacific (APAC) region is seen to grow by 80 percent YoY 2H12, driven by 4Q12 demand at the 5.3GW level. While major European markets have historically fueled strong year-end PV demand, 4Q12 will represent a transition phase within the PV industry, as demand becomes increasingly global and further diversified across new and emerging PV regions, added the market research firm.

According to Wolfgang Schlichting, research director at NPD Solarbuzz, "Strong growth in APAC and other emerging PV markets is providing new impetus for companies active within downstream PV segments. However, in established PV markets, the short-term business environment will remain challenging for the remainder of 2012, with continued reductions in incentive policies and uncertainties due to the ongoing trade disputes."

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Figure 1: Shift in 4Q12 Demand from Major European Markets to the APAC Region
Source: NPD Solarbuzz European PV Markets Quarterly and Asia Pacific Major PV Markets Quarterly.

Growth across APAC has already provided a significant boost to overall 2Q12 demand. The region showed more than 60 percent YoY growth, reaching 1.4GW and compensating for the softening in demand across established markets. In particular, PV market demand in China grew by more than 300 percent in 2Q12 to reach 0.6GW, stimulated by deadline requirements for the completion of Golden Sun PV projects.

Another APAC country providing new downstream opportunities is Japan. Combined with the year-end projects planned within China and India, the Japanese Feed-In Tariff (FIT) program is now setting up 4Q12 as a quarter of potentially massive PV demand pull across APAC. More than 50 percent (or 5.3GW) of calendar-year 2012 APAC demand is forecast to occur in 4Q12.

However, this boom at year-end in APAC provides both challenges and risks for module suppliers, balance-of-systems providers and project developers. PV demand within many APAC regions continues to be characterized by highly-competitive pricing with low-margin returns. In addition, any delays in project financing could lead to oversupply at year-end ahead of a seasonally-driven downturn in 1Q13, when APAC demand is forecast to decline to just 2.1GW.

Despite the expiration of the federal cash grant in the U.S., the North American PV market grew 50 percent YoY to 1.4GW in 1H12. The Renewable Portfolio Standard (RPS) continues to be a key driver in North America, accelerating deployment of utility-scale projects, not only in California and Arizona, but also Illinois. Driven by RPS compliance requirements, the U.S. market is forecast to add 1.2GW of ground-mount PV systems in 2H12, representing 60 percent of H2 U.S. demand, added NPD Solarbuzz.

The European PV market grew 32 percent YoY during 1H12 to 8.5GW. However, incentive reductions in Germany, Italy and other major European PV markets continue to erode the demand-share previously commanded by these former PV market leaders. Growth opportunities within Europe are forecast to shift to emerging markets during the next couple of years, including Austria, Denmark, Israel and various countries in the east and southeast of Europe.

In the coming quarters, the global PV market will remain highly competitive with existing PV manufacturers under extreme pressure to expand into the downstream channels as a perceived higher-margin segment. "The ability to adjust quickly to changing market conditions arising from sudden policy changes, trade action, or competitive strategies will become essential for industry participants," added Schlichting.





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