Feb 02 2013
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'Solar trade wars will rage on in 2013'
However, the falling prices, coupled with relatively smaller volume growth, is going to hit the revenues of the solar firms. Total installations in 2012 stood at 32GW, which is expected to rise by 9.38 percent to 35 GW in 2013. "Solar installations have sustained growth for more than six years in a row and this trend is likely to continue "until at least 2017," said Ash Sharma, director, solar research at IHS.
However, in the short term, the rate of growth is going to slow down. The revenues of the market will decline to about $75 billion in 2013, which is $2 billion less from 2012 and $19 billion less from its peak level of $94 billion in 2011.
Moreover, "solar trade wars will rage on in 2013, yielding few winners," the report noted. As of November 2012, there were six different solar trade cases proceeding involving China, Europe, the US and India. This cycle of sanction and retaliation will not help solve the fundamental challenge of overcapacity plaguing the global PV industry.
South Africa and Romania will emerge as PV markets to watch in 2013. The two countries will expand from virtually no solar installations to capacity of several hundred megawatts.
The PV uptake in both markets is driven by distinct factors. In South Africa, PV additions will mainly stem from the tenders awarded in 2012; in Romania, the growth driver will be a green certificate (GC) scheme that will stay in place until 2014.
The solar module industry will consolidate further in 2013. As 2012 comes to a close, fewer than 150 companies will remain in the photovoltaic upstream value chain, down from more than 750 companies in 2010. Most of the consolidation will involve companies going out of business entirely. Many integrated players, particularly those based in China, will fold up shop in 2013. The large expense of building and then operating integrated facilities that are underutilized will be more than many can handle financially.
PV module prices will stabilize in 2H 2013 as oversupply eases. Despite a drastic decline in prices along the silicon supply chain since March 2011, solar prices will stabilize by mid-2013. Changes in market dynamics will help restore the global supply-demand.
Solar will surpass wind in the United States. The year 2013 marks an important milestone, representing the first time that new US solar PV capacity additions will be greater than those made by wind. 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 PV's increasing competitiveness as a form of renewable power generation in some key US markets.
China will become the world's largest PV market. Total PV installations in China next year are predicted to surpass 6 gigawatts, allowing the country to surpass Germany as the No. 1 solar market on the planet.
Batteries increasingly are being seen as an attractive way of retaining PV electricity, letting people use the power later in the day to avoid paying high prices for electricity from the grid.
IHS forecast a big jump in the number of residential PV systems installed with batteries attached this year.
New technology will revive equipment vendors' prospects. Improved technologies will help PV manufacturers cut costs, increase margins and ultimately distinguish themselves from the competition. Such a focus creates an opportunity for both manufacturers and equipment suppliers to obtain larger revenue streams.
The leading players in the industry such as First Solar, Inc., SunPower Corporation and Yingli Green Energy Hold. Co. Ltd., will continue to focus on driving down their manufacturing costs. The industry will witness consolidation across the upstream supply chain with the number of firms falling to 150 in 2013.
Meanwhile, the geographic dynamics of the industry are changing with Asia looking to replace Europe as the biggest market. Until 2010, the solar industry was primarily focused on Europe, which accounted for 80 percent of the global demand. By 2012, the demand of PV from this debt-ridden continent shrank to 53 percent and will fall further to 39 percent in 2013. Germany, which accounted for most of the solar sales and was the number one solar market in the world, will be pushed back to the third spot in 2013 with its place being taken over by China, home of five of the 10 biggest global solar companies. The US, Japan and Italy will secure the second, fourth and fifth positions, respectively.
Despite the current FiT cuts in Japan, the country will continue to attract investments in its solar sector and will remain one of the leading markets.
On the other hand, the total demand for solar PV and systems from the top five markets mentioned above is expected to fall by 10 percentage points to 65 percent in 2013. That gap is being filled by the new "mid-sized markets" such as South Africa, Romania and Saudi Arabia. This is an even bigger development that signifies that with the fall in average selling prices and rising energy needs of the emerging economies, the solar industry is becoming more global. IHS forecast that this will bring more stability in the industry and will change the trend of falling revenue levels in the long term. The sales are expected to touch "double-digit" growth levels from 2014 till 2016. Total revenues will increase by 53.33 percent from the current levels to $115 billion in 2016, which would reflect a significant turnaround.
Global installations recorded again in 2011 and reached 27.8 GW translating into a growth of 55 percent YoY from 146 percent in 2010.
Most notably, the Italian market more than doubled in size in 2011 similar to the German market in 2010. This doubling occurred from already significant volumes installed in the year before.
According to IHS iSuppli's analysis, the Italian market was the biggest in 2011 on a global basis.
Germany slightly exceeded its extremely high installation volumes of 2010 and was the second-largest market in 2011. China came up strongly and became the third largest PV market in 2011, more than tripling its installation volumes.
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