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PV supplier market looks bright in 2013: IHS

Posted: 18 Jan 2013     Print Version  Bookmark and Share

Keywords:solar  PV  module 

A new PV module shipment record of 11GW marked a surge in demand in the fourth quarter of 2012 after a disastrous third quarter featuring extremely low factory utilisation rates across the entire PV supply chain, according to IHS.

Despite this positive sign the situation of the global PV industry remains critical and a substantial recovery of the supply-demand balance is not expected to occur before the second half of 2013, IHS noted.

PV markets rebound sharply in the fourth quarter of 2012
The third quarter of 2012 dealt another blow to the global photovoltaic industry. After a relatively strong second quarter resulting in global installations of 7.8GW, markets softened again. "Installations in the third quarter amounted to just 7.5GW. Wholesalers, EPCs, and PV suppliers were forced to carefully control their inventory levels due to falling prices and low shipment levels and production cuts were the consequence," commented Principal Analyst, Stefan de Haan. In the third quarter of 2012, average module capacity utilisation fell to 49 per cent, cell capacity utilisation to 56 per cent, wafer capacity utilisation to a record-low 55 per cent, and polysilicon capacity utilisation to 63 per cent. In parallel, prices continued their slide in the third quarter of 2012 resulting in module industry revenues of only Rs.32,786.89 crore ($6 billion)—the lowest value since the second quarter of 2009. These difficult conditions were reflected in an increasing number of suppliers exiting the market.

"In the fourth quarter of 2012 global PV markets rebounded sharply. Very strong demand from Asia, with the surge driven largely by China and Japan, helped to compensate for sluggish demand in Europe. IHS estimates that global PV installations were 10.1GW in the fourth quarter of 2012. In particular leading Chinese module suppliers benefited from the uptick in demand and shipped much more than previously expected," explained de Haan. In total, 11GW of global module shipments are estimated for the fourth quarter of 2012—a new record for the industry. As anticipated by IHS, average market pricing for crystalline modules declined to Rs.35.52 ($0.65) per watt at the end of 2012, down from Rs.38.25 ($0.70) at the end of September. Importantly, however, the price decline lost momentum in the course of the fourth quarter. Towards the end of the year some module prices even increased. Record-level shipments paired with stabilising prices drove a profound recovery of revenues. According to the IHS Solar Integrated Market Tracker, fourth quarter 2012 module revenues grew by a stunning 42 per cent quarter-over-quarter, reaching Rs.46,448.09 crore ($8.5 billion).

Suppliers will experience seasonal weakness in the first quarter of 2013
In the first quarter of 2013 suppliers are predicted to experience the usual seasonal weakness of global solar markets. Global PV installations are forecast to drop to 6.7GW in this quarter. As a result upstream shipments and revenues will temporarily come under pressure again. With prices forecast to decrease by another 4 -5 per cent in the first quarter of 2013 (compared to the fourth quarter of 2012), module revenues will fall back to the critical levels of the third quarter of 2012—or even below. This will force more suppliers to review their business models and eventually leave the solar market.

2013 will be the year of the turnaround
After a tough first quarter, a substantial increase in global demand is forecast to drive increasing revenues and stabilising prices in the second half of 2013. IHS forecasts 35GW of global installations in 2013, up 10 per cent over 2012. Although this level of growth is lower than previous years, it will drive a continuous improvement of shipments and revenues in the polysilicon to module supply chain throughout 2013. Recent positive signals from authorities in several key markets like China and France raise hopes for the recovery of the PV industry to happen even faster. "Whilst it's too early to give the all-clear for the PV supplier industry, there is increasing indication that the year 2013 will mark the turnaround," concluded de Haan.

The chart below presents a forecast of global shipments of the photovoltaic module industry (crystalline and thin film).

Solar module forecast

For more statistics and forecasts, click here.

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