Solar photovoltaic (PV) market analysts at NPD SolarBuzz see industry-wide PV module revenues increasing, but not until 2015.
Industry-average selling prices (ASPs) for PV modules dropped precipitously — some 50% year over year in 2012 — while end-user demand increased just 5%, NPD Solarbuzz notes in its latest 2013 Marketbuzz, Solarbuzz Quarterly, and annual downstream PV market reports.
PV cell and module manufacturers significantly expanded capacity in 2010 and 2011, with potential supply reaching 45 gigawatts (GW) as compared to 29 GW of actual demand. The huge supply overhang and precipitous price drops have since inflicted a lot of financial pain. Ongoing market and broader economic weakness and uncertainty in the US, Europe, and Asia is adding to the pressure, as governments pull back and reduce financial support, subsidies, and other incentives.
Solar Manufacturing: More Pain Before Gain
In late March, China’s Suntech Power, which just last year produced more solar PV panels than any other manufacturer in the world, was forced into bankruptcy as a result of taking on a huge amount of debt to expand capacity. In contrast, the Chinese government, with intense lobbying from local government officials, has stepped in to support creditors and avoid a bankruptcy filing by another industry-leading solar manufacturer, LDK Solar.
NPD Solarbuzz analysts see further contraction and consolidation ahead. Coupled with ongoing growth in demand, that should open up opportunities for the survivors to realize market share gains.
“Module ASPs will continue to decline at a slower rate than in the last two years, which will provide an opportunity for leading module suppliers to implement cost reduction steps and create a profitable environment when the end-market demand approaches 46 GW in 2015,” according to the Santa Clara, California-based market research company.
2015 Turnaround Forecast
NPD Solarbuzz forecasts solar PV industry module revenues will fall to $20.5 billion this year, a 20% decline from $25.2 billion in 2012. They will remain below 2012 levels in 2013 before turning upward in 2015 to reach $32 billion in 2017, according to the NPD Solarbuzz Marketbuzz 2013 report.
“Manufacturing over-capacity and declining revenues had a dramatic impact on the PV industry in 2012, and this trend will continue during 2013,” NPD Solarbuzz senior analyst Michael Barker was quoted in a press release.
“Share values of several publicly listed PV companies have been falling close to delisting levels, operating losses have been reported in the hundreds of millions of dollars per quarter, and many manufacturers are continuing to file for insolvency. Predicting how and when the solar PV industry will rebound to profitability has now become essential for all industry participants.”
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