PV Market Outlook Brightens, 8.6GWs of Installations and 51% Growth Forecasted for 2010

There are numerous catalysts which should make 2010 a tremendous year for the PV industry consisting of lower prices, impending changes to Feed-in Tariffs (FiTs) and growth in subsidy efforts including:

• Germany - The new government is expected to announce in 1H’10 a lower FiT for at least ground mounted installations that would likely start in 2H’10, causing rapid Y/Y growth in 1H’10 installations before the FiT changes take effect. We are seeing a similar rush in 2H’09 before conventional FiTs change in January 2010.
• Italy - the FiT is to be lowered once cumulative installations reach 1.2GWs which could happen in 1H’10 resulting in lower FiTs from 2011 and rapid demand growth in 2H’10.
• France – Expected to increase their FiT for BIPV and ground mounted PV by more than 7% in 2010. 
• China - the regulatory and approval processes are expected to be in place to implement their rooftop, power plant and FiT programs resulting in rapid growth.
• Canada - will benefit from the attractive Ontario FiT program which began to implemented in December. 
• Japan – FiTs are expected to be introduced although recent adoption of subsidies for residential and non-residential PV has already led to significant growth.
• South Korea – 32% increase in their market cap to 132MWs should lead to a strong year.
• USA - DOE loan guarantees, the continuation of the federal ITC, growing availability of federal land and buildings, state carve-outs and state renewable portfolio standards and other state mandates are expected to lead to rapid growth.
• Lower prices – The oversupply in polysilicon may not improve as most suppliers continue to boost capacity likely resulting in lower polysilicon prices and additional cost and price reduction opportunities for c-Si suppliers which should continue to result in pricing pressure on thin film suppliers.

The strong results in Q3’09 and bright Q4’09 outlook will result in a flat 2009 market in terms of PV installations as shown in Figure 1 after a disastrous 1H’09. Looking forward to 2010, we expect installations to rise 51% to over 8.6 GWs. PV market forecasting requires scenarios due to the impact of changes to FiT and subsidy efforts on demand and we are showing that the market could more than double to nearly 11GWs in 2010 if governments act favorably to PV. In the mid-case in 2010, we expect power plants and large commercial installations to fuel the growth, rising 108% and 75% respectively, as credit becomes looser as shown in Figure 2. Small commercial will remain the leading application in 2010 due to its strong position in the German market, but by 2011, the power plant market will be the single largest application for PV driven by lower prices and rising demand in China and the US. We are also showing 23 different countries with over 50% growth in 2010 with the PV market becoming less dependent on a single market which is essential for its long term health. IMS Research tracks and forecasts the PV market by application for over 50 different individual countries.

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Figure 1: PV Installation Forecast (Source: IMS Research’s PV Cells & Modules – World 2009 and PV Weekly Supply Chain Health Report)

Figure 2: PV Installation Forecast by Application  (Source: IMS Research’s PV Cells & Modules – World 2009 and PV Weekly Supply Chain Health Report)