31 GW worth of worldwide photovoltaic installations took place in 2012, despite the fact that prices continued to decline and current supplies remained at over capacity. It is forecast that growth in Q2 for 2013 will make up for losses in Q4 2012. Although the prices of photovoltaic modules declined in the fall of 2012, much of this drop-off is expected to make up for that loss in the fourth quarter of 2013.
The decline in prices is not expected to be stalled by current demand, despite a Q2 increase in installations, which occurred in Germany, increasing the number of installations globally up to 8.2 GW from 4.9 GW in the second quarter of 2011. This seeming temporary rise in demand is rumored to have assisted the decline in prices of slow cells and modules. Though, the demand of cooling equipment increased and is expected to continue to increase for the remainder of the year.
The photovoltaic market for modules decreased from 7.03 and 7.04 billion in the first and second quarter of 2012, to $6.63 billion in the third quarter. Revenues were expected to again decline to 6.62 billion in the fourth quarter of 2012, and so they did. The price of modules fell 14% in the third quarter. Crystalline module prices also fell further in the fourth quarter by another 9%, down from 0.70/W to 0.64 in September 2012. This trend is expected to ease in 2013, with a forecast price of $0.55 in the fourth quarter.
Factors affecting prices:
Along with overcapacity, the increasing and consistent demand for installations in China, and therefore a reduction in the module exports of China, will cause the price of the global market to sink further. The IHS said “Many solar projects which have been delayed in the country will be revived for the rest of the year and assist the global installation prices, China remains to be a market of low prices. Because of this, even an exceptional Q4 in China likely will not help in recovery of prices”, said the Principal Analyst of IHS, Stefan de Haan.
He also included, “A reduction in the shipments of modules to Europe by Chinese producers has occurred following an investigation by the European Commission. European wholesalers will try to limit their dependence on suppliers in China in the upcoming quarter in an attempt to balance costs, while the Chinese will reduce their exports voluntarily.”
Ultimately the IHS has predicted that duties on European installations will not be imposed, but that continuing pressure on prices for Chinese suppliers is increased because of confusion over the finality of this decision, which will be made in December of 2013.
Overcapacity is expected to decrease and enable the market for photovoltaics to pick up in the second quarter of 2013. An increase of 10% on photovoltaic installations globally is expected for the entirety or 2013, despite a weakened demand in Europe, because of increases in China and Japan.
Article written by Jennifer Coleman of Sun Source Solar Energy Brokers, providing solar brokering, brokerage, and solar energy consulting services in Santa Rosa, Marin, Sonoma, Napa, Solano and San Francisco Counties. For more information, please visit www.SunSourceSolarBroker.com.