ISuppli Boosts 2010 Solar Installation Forecast

Stronger than expected growth in Germany has prompted iSuppli Corp. to boost its 2010 forecast for global installations of Photovoltaic (PV) solar systems. Worldwide installations in 2010 will amount to 15.8 Gigawatts (GW), up from iSuppli's previous outlook of 14.2GW. This will represent 118.7 percent growth from 7.2GW in 2009. iSuppli now forecasts that installations in 2011 will amount to 19.3GW, down slightly from its previous forecast of 20.2GW.

"Germany's solar business-the world's largest market-grew at an extraordinary rate in the second quarter of 2010, causing PV installations to exceed expectations during the first half of the year," said Stefan de Haan, senior analyst, for iSuppli. "In the first half, Germany installed 3.9GW worth of solar systems. Germany's surprising performance was driven by excellent investment conditions and demand pull-forward prior to a cut of the country's Feed-in-Tariff (FIT) incentive program in July."

While iSuppli has trimmed its 2011 forecast, next year still is expected to be very strong for the PV market. Ironically, the strong performance for the entire year will be driven by a seasonal slowdown in installations during the first six months of 2011. This deceleration will drive down pricing for solar modules and stimulate demand in the second half of the year.

"The solar market frequently suffers a slowdown in the first quarter of a year, and 2011 will be no exception," de Haan said. "This deceleration will cause inventories of PV solar modules to rise-and pricing for solar modules to drop, boosting sales for the entire year."

Average worldwide pricing for crystalline solar modules will decline by 9 percent in the first quarter and by 6 percent in the second quarter. These price declines will be sufficient to enable system prices of 1.9 euros to 2.7 euros per watt in Germany-depending on the system size. Once this level is reached, demand will pick up again. iSuppli is reiterating its expectation of a strong market in Germany next year with 9.4GW worth of new installations.

iSuppli's slight reduction in the 2011 forecast was due to shifts in solar incentive policies in important European markets, mainly France and Spain, the world's seventh and 10th largest solar installation markets in 2009. In Spain, significant FIT cuts are looming for 2011; a-a 45 percent decrease for ground installations is being discussed. In France, political support for PV seems to be crumbling in general and is limit the annual market to less than 1GW until 2014.  Furthermore, Belgium-the sixth largest country for solar installations, is expected to develop a bit slower than previously anticipated, which is in part due to a new legislation that has tightened the requirements for rooftop installations. 

Finally. a drastic decline of the Czech market in 2011 is now clearly shaping up on the horizon and has already been included in iSuppli's forecasts since February 2010.