Global Solar PV Grew 40% in 2011, Decline Projected for 2012

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The 40% year-over-year growth in global solar photovoltaic (PV) installations in 2011was partly driven by developers racing to bring projects in before governments make deeper cuts in solar power incentives.

Craig Stevens, the president of NPD Solarbuzz, said: "Aggressive cuts in incentives in Germany and other European countries have set up the potential for a global market decline in 2012, but ahead of these, the rush to install is on, especially in Germany."

In 2011, worldwide solar PV installations reached a record high of 27,400 megawatts (MW), with 74% of global demand taken up by Germany, Italy, China, the U.S and France. China's PV market grew a massive 470% in the year, moving it to third place behind Germany and Italy. China also continued to dominate and grow in the manufacture of crystalline silicon wafers and cells as the share of thin film declined. Demand in Asian markets grew rapidly. China and Taiwan accounted for 74% of global cell production.

The PV industry generated $93 billion in global revenues in 2011, up 12% year over year, and the industry raised more than $8 billion in corporate equity and debt.

European countries accounted for 18,700 MW (68%) of world demand in 2011, down from 82% in 2010. Germany, Italy and France accounted for 82% of the European market.

World solar cell production reached 29,500 MW in 2011, up from 23,000 MW in 2010. This film represented 11% of production. The top 10 polysilicon manufacturers had 204 tons of annual capacity in 2011, and the top 10 wafer manufacturers accounted for 20.7% of global capacity.

Factory-gate PV module prices dropped 28%, with a further decline of more than 29% projected in 2012. In the fourth quarter of 2011, market-weighted average crystalline factory-gate module prices dropped 46% year over year, reported SolarBuzz.

Stevens said: "Cutbacks in polysilicon wafer and cell production plans before mid-year will be required to avoid further damaging margin declines. Meanwhile it is significant that polysilicon manufacturing capacity, for long the most constrained and profitable part of the PV chain, now has the highest capacity in the PV chain. The cuts in tariffs will force companies to embrace self-sustaining marketing models earlier than they expected. Meanwhile Chinese policy makers will face a decision whether to stimulate their domestic market even more than planned to support their globally dominant manufacturing base."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.