2H’12 PV Demand to Transition from Major European Countries to APAC and Other Emerging Regions
Santa Clara, Calif., August 27, 2012—PV demand from the Asia Pacific (APAC) region is forecast to grow by 80% Y/Y during 2H’12, driven by Q4’12 demand at the 5.3 GW level, according to new research featured in the NPD Solarbuzz Asia Pacific Major PV Markets Quarterly. While major European markets have historically fueled strong year-end PV demand, Q4’12 will represent a transition phase within the PV industry, as demand becomes increasingly global and further diversified across new and emerging PV regions.
According to Wolfgang Schlichting, Research Director at NPD Solarbuzz, “Strong growth in APAC and other emerging PV markets is providing new impetus for companies active within downstream PV segments. 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.”
Figure 1: Shift in Q4’12 Demand from Major European Markets to the APAC Region
Source: NPD Solarbuzz European PV Markets Quarterly and Asia Pacific Major PV Markets Quarterly
Asia Pacific Demand to Peak in Q4’12
Growth across APAC has already provided a significant boost to overall Q2’12 demand. The region showed more than 60% Y/Y growth, reaching 1.4 GW and compensating for the softening in demand across established markets. In particular, PV market demand in China grew by over 300% in Q2’12 to reach 0.6 GW, stimulated by deadline requirements for the completion of Golden Sun PV projects.
Another APAC country providing new downstream opportunities is Japan. Combined with the year-end projects planned within China and India, the new Japanese Feed-In Tariff (FIT) program is now setting up Q4’12 as a quarter of potentially massive PV demand pull across the APAC region. Over 50% (or 5.3 GW) of calendar-year 2012 APAC demand is forecast to occur in Q4’12.
However, this boom at year-end in APAC provides both challenges and risks for module suppliers, balance-of-systems providers, and project developers. 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.
Opportunities Still Emerging in Europe and North America
Despite the expiration of the federal cash grant in the US, the North American PV market grew 50% Y/Y to 1.4 GW in 1H’12. The Renewable Portfolio Standard (RPS) continues to be a key driver in North America, accelerating deployment of utility-scale projects, not only in California and Arizona, but also Illinois. Driven by RPS compliance requirements, the US market is forecast to add 1.2 GW of ground-mount PV systems in 2H’12, representing 60% of the second-half US demand, according to the NPD Solarbuzz North America PV Markets Quarterly.
The European PV market grew 32% Y/Y during 1H’12 to 8.5 GW. However, incentive reductions in Germany, Italy, and other major European PV markets continue to erode the demand-share previously commanded by these former PV market leaders. Growth opportunities within Europe are forecast to shift to emerging markets during the next couple of years, including Austria, Denmark, Israel, and various countries in the east and southeast of Europe.
Over the coming quarters, the global PV market will remain highly competitive with existing PV manufacturers under extreme pressure to expand into the downstream channels as a perceived higher-margin segment. “The ability to adjust quickly to changing market conditions arising from sudden policy changes, trade action, or competitive strategies will become essential for industry participants,” added Schlichting.
The NPD Solarbuzz PV Market Quarterly reports (Asia Pacific Major PV Markets Quarterly, European PV Markets Quarterly and North America PV Markets Quarterly) identify specific challenges and potential opportunities for companies that are currently active, are seeking to enter, or are required to understand European, Asian, and North American downstream PV channels and demand trends. Other analysis includes the impact of financing (bank lending), grid saturation concerns, and the benefits of grid parity. The report has strong data-driven components and analyses of PV policies, distribution channels, investments, and PV application segments. It features extensive market analysis for established and emerging PV markets.