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IHS Predicts Solar PV Module Revenue To Hit Record $41.9 Billion In 2016

New figures from IHS predict global PV module revenue to reach a record $41.9 billion in 2016.

Analysts at IHS believe that “a period of strong growth” for the global solar PV industry is nigh, “thanks to a new wave of capacity expansions, a relatively stable pricing environment, and increasing demand from several established regional markets.” Specifically, 2015 growth — which will see PV module shipments grow by 29% year-over-year in the fourth quarter, reaching 18.7 GW — will continue into 2016, when IHS predicts global shipments to grow by 10%, with global PV module revenue hitting a record $41.9 billion — exceeding the previous record set in 2010 by 4%.

IHS-15

“Compared to prior years, this period of strong growth in solar installation demand, coupled with tight supply, will support relatively robust pricing,” said Edurne Zoco, senior principal analyst for IHS Technology. “In fact average annual prices are forecast to decline significantly less than in previous years.”

“This year and next year will mark a climax in the recovery of the solar PV sector, after a period of intense price reductions and margin compression, when average gross margins fell into the mid single digits or lower,” Zoco said. “Even so, the predicted slowdown in global demand in 2017 — on the back of a decline in the United States — is likely to challenge these suppliers once again, since manufacturing capacity additions are set to dangerously outpace industry demand. Competition will intensify, which will lead to accelerating declines in prices and gross margins, for the first time since 2012.”

Specifically, the US solar PV industry is awaiting the likely-reduction in the Federal Investment Tax Credit, which will drop from the current 30% to 10% for commercial systems and zero for residential systems by the end of 2016. Recently, over 2,000 organizations representing “millions of individuals, employees, businesses of all sizes, community development organizations, and non-profit organizations” signed a letter last week, imploring the US Senate and House of Representatives to “act immediately on a seamless, multiyear or permanent extension of the expired and expiring tax provisions” — which includes (PDF) the Investment Tax Credit.

 
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