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2012: Solar market to remain uncertain in India

Posted: 30 Dec 2011     Print Version  Bookmark and Share

Keywords:solar energy  wafers  modules  market report 

The global solar industry will undergo a year of survival of the fittest in 2012, according to EnergyTrend, the green energy division of market watcher TrendForce Corp. The analyst says the weak players will be weeded as subsidies decrease and policies focus on controlling total installation volume.

Although policies for emerging markets have been mapped out, the analyst says it will take some time before they take effect. At the same time, spot prices from wafers to modules are still low, and this slim margin has manufacturers hanging by a thread.

According to the analyst's estimates, global solar installation capacity in 2011 will reach 19GW, but the overall inventory amount, including semi-finished and finished products, will reach as high as 10GW. Thus, the market is still oversupplied.

Also, the demand in the solar market is expected to remain stagnant at about 19GW in 2012. This is because, although demand is increasing in Asia, it is dropping in Italy, Germany and the United Kingdom because of subsidy policies changes in Europe. In Asia, the slight increase in demand is driven by subsidy policies in China, Japan, Malaysia and Thailand. The analyst expects some growth in 2013.

"In North America and India, solar remains uncertain. For the India market, while the National Solar Mission drives solar demand, the government's efficiency and financial health together with the enforcement of the Local Content Requirement policy may dampen the bright prospects in the India solar market," said TrendForce.

A levelized cost of energy analysis finds that system costs incorporate module costs, balance of system (BoS) costs and system operating performance. In terms of module costs, the research believes that as the capacity of polysilicon increases, the module costs will return to a healthy level, although the price downtrend is expected to cease for the time being. As for BoS costs, compared to module costs which reflect the current market conditions, prices of products such as the solar inverters and EPC remain stable. Therefore, the cost adjustment in the future will mainly depend on BoS costs. Aside from the cost adjustment, the enhancement of system efficiency is another pressing issue for the manufacturers, which results in the increasing demand for high-efficiency products.

"As for the future of the solar market, N-type Mono/Mono-Like products and technologies will play an integral role."

EnergyTrend concludes that these trends in prices, market dynamics and technology make 2012 the year for the solar industry leaders to secure their positions. Manufacturers that are unable to attain price or technology competitiveness will be merged or run out of business. Only those who survive the fierce competition this coming year will be able to benefit from the eventual rebound of the solar market.

For more statistics and forecasts, click here.

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