SAN JOSE, Calif. — A steep drop in sales for solar photovoltaic systems this year will create a shakeout, pruning back an overbuilt industry, according to one market research company. Reductions in government subsidies in Spain--a big market driver last year--are a primary cause of the downturn, but the company projects a return to strong growth in 2011.
Worldwide installations of solar photovoltaic systems will decline to 3.5 gigawatts in 2009, down 32 percent from 5.2 GW in 2008, according to iSuppli (El Segundo, Calif.). In addition, average selling prices per solar watt will decline by 12 percent, leading to a 40.2 percent plunge to $18.2 billion in global revenues for PV installations in 2009, down from $30.5 billion in 2008.
Click on image to enlarge. |
"For years, the PV industry enjoyed vigorous double-digit annual growth in the 40 percent range, spurring a wild-west mentality among market participants," said Henning Wicht, a principal analyst for iSuppli.
The growth attracted "an ever-rising flood of market participants," some of whom may not survive this year's steep downturn, he added. "The number of new suppliers entering and competing in the PV supply chain will decelerate and the rate of new capacity additions will slow, bringing a better balance between supply and demand in the future," Wicht said.
Earlier this month, an investment banking firm cut its outlook for several leading solar vendors amid falling prices and other issues in the sector.
Spain accounted for a whopping 50 percent of worldwide PV installations in 2008 as installers tried to cash in on feed-in tariffs before a scheduled reduction in the subsidies. The country now has a cap of 500 megawatts on projects qualifying for the above-market tariff.
New and upgraded incentives for solar installations from nations including the United States and Japan will not compensate for the Spanish pullback, Wicht said. Excess inventory and falling prices for solar cells and systems also will not stimulate the market enough to overcome the downturn, he added.
The current financial crisis is also to blame for the solar downturn.
"Power production investors and commercial entities are at least partially dependent upon debt financing," Wicht noted. "Starting in the first quarter of 2009, many large and medium solar-installation projects went on hold as they awaited a thaw in bank credit flows."
The downturn may be short lived. The market watcher predicts a 57.8 percent increase in revenue in 2011 and similar growth rates in 2012 and 2013.
"PV remains attractive because it continues to demonstrate a favorable return on investment," Wicht said. "Furthermore, government incentives in the form of above-market feed-in-tariffs and tax breaks will remain in place, making the RoI equations viable through 2012.
"Cost reductions will lead to attractive RoI and payback periods even without governmental help after 2012," he added.
Declining system prices will open up new markets in the longer term especially in developing regions, he said. The company's latest report on the PV market is available online.
Click on image to enlarge. |
RSS
Digital
10 emerging technologies to watch:
EE Times has compiled a list of emerging technologies that we think will be worth watching out for in 2010. Biofeedback or thought-control of electronics are among the contenders.
Hot applications in 2010:
We've compiled a list of 10 technology applications you should watch for in 2010, ranging from e-book readers to 3-D TVs. We examine the features that make these apps so compelling as well unresolved issues.
'09 moves that are shaping the future:
This was a brutal year, but the industry gets a nod for showing grace under fire. Here's our Top 10 guide to the coming year, illustrating what to expect in 2010.
10 companies in trouble (revisited):
What follows is an updated version of 10 companies in trouble. Some companies have been removed since the last version, others remain. Still others have been added to the mix.
Early predictions for 2010:
The electronics industry is recovering, but there is still some uncertainty in the market. Some see a boom year in 2010. Some see a double dip. So what's in store for the rest of this year and 2010?
10 CEOs out in 2009:
It's been a tough year for the global electronics industry and CEOs. We survey the dismissal of 10 industry CEOs during the first three quarters of 2009 and what's ahead for the rest of the year.
Notable women in microelectronics:
There is no better time than a global economic recession to examine the keys to successful corporate governance. So, EE Times has compiled an international list that celebrates women who are business and technology leaders in semis.
EE Times updates Silicon 60:
Seventeen companies have been added to the lastest version of our Silicon 60 list of emerging startups. Forty-three companies survived as emerging companies that are still worth watching.
RSS| 
Digital| 
Mobile
