Strong fourth-quarter demand for solar photovoltaic (PV) power will drive 80% year-over-year (YoY) growth in the Asia-Pacific region (APAC), according to the NPD Solarbuzz Asia-Pacific Major PV Markets Quarterly. APAC regional demand for solar PV will total 5.3 GW in Q4 2012, the Santa Clara, California–based market research firm forecasts.
Historically, European markets have driven year-end demand for solar PV. Europe’s debt problems, which have led to fiscal austerity and recession in several European Union (EU) member nations; oversupply; precipitous drops in the price of solar PV panels; reductions in government solar energy incentives; and rising international trade litigation are all putting pressure on solar PV industry participants, however. But, that’s being offset by market growth and diversification in other countries and world regions.
“Strong growth in APAC and other emerging PV markets is providing new impetus for companies active within downstream PV segments,” NPD Solarbuzz research director Wolfgang Schlichting commented. “However, in established PV markets, the short-term business environment will remain challenging for the remainder of 2012, with continued reductions in incentive policies and uncertainties due to the ongoing trade disputes.”
Confluence of Stimulus to Boost Q4 APAC Solar PV Demand
Asia-Pacific demand for solar PV has been surging throughout 2012 thus far, according to NPD Solarbuzz’s reckoning, increasing more than 60% YoY to reach 1.4 GW. Demand for solar PV in China has been particularly notable, increasing more than 300% in Q2 to reach 0.6 GW. Meeting a deadline for the government’s Golden Sun solar energy incentive program spurred demand, the market research firm notes. Japan’s July introduction of a generous, new renewable energy feed-in tariff (FiT) for solar PV similarly stimulated growth in the APAC region.
The confluence of solar PV stimulus from China, India, and Japan is “setting up Q4 2012 as a quarter of potentially massive PV demand pull across the APAC region,” according to NPD Solarbuzz. “Over 50% (or 5.3 GW) of calendar-year 2012 APAC demand is forecast to occur in Q4 ’12.”
Cutthroat competition among industry participants, as well as governments, to forge leading positions in the global solar and renewable energy sectors, however, poses challenges and risks as well as opportunities for market and industry participants across the value chain.
“This boom at year-end in APAC provides both challenges and risks for module suppliers, balance-of-systems providers, and project developers,” according to NPD Solarbuzz’s analysis. “PV demand within many APAC regions continues to be characterized by highly-competitive pricing with low-margin returns. In addition, any delays in project financing could lead to oversupply at year-end ahead of a seasonally-driven downturn in Q1’13, when APAC demand is forecast to decline to just 2.1 GW.”
Turning to North American demand for solar PV, NPD Solarbuzz points out that the NA market for solar PV surged 50% higher YoY to 1.4 GW in 2012’s first half despite expiration of the Treasury 1603 cash grant program.
Utilities need to meet state Renewable Portfolio Standards (RPS), and continue to drive solar PV demand in North America. That’s resulting in ongoing investments in utility-scale solar PV projects. NPD Solarbuzz forecasts 1.2 GW of ground-mounted solar PV capacity will be added in North America in H2 2012, accounting for some 60% of total demand through the second six months of the year.
Despite ongoing debt troubles and fiscal austerity, demand for solar PV in Europe grew at a rapid 32% YoY to 8.5 GW in H1 2012. Incentive reductions in Italy, Germany, and other key European solar PV markets is taking its toll, however. NPD Solarbuzz predicts that solar PV demand will increasingly shift to emerging solar PV markets during the next couple of years. Those include developed economies, such as those of Austria, Denmark, and Israel, as well as various countries in eastern and southeastern Europe.
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