IMS Research’s latest analysis of the global PV industry reveals that global PV module shipments for the quarter declined by nearly 10%. Average prices, which had remained strong throughout 2010, supported by high demand from major European markets, also fell sharply. Shipments and prices are forecast to continue their decline in the second quarter, with the prices of crystalline modules from Chinese Tier-2 suppliers falling the quickest.
Great uncertainty in the Italian market has been a significant factor in slowing the booming PV market. Demand from Italy came to a stand-still overnight when it was announced that the current feed-in tariff would be suspended. This has led to high inventory levels and crashing end-market prices.
“Suppliers that are dependent on the Italian market saw demand for their products quickly evaporate when the feed-in tariff was suspended,” says Sam Wilkinson, PV Market Analyst at IMS Research. “Many manufacturers rapidly adjusted production in an attempt to prevent stock from building. However, distributors were already stocking large amounts of product and the total worldwide PV module inventory has now reached a record amount of over 10 GW in Q2’11. Many companies have already begun dumping prices in order to clear it”.
After a long wait, on 5th May 2011, the Italian government finally confirmed the country’s new incentive scheme, which will restart 2010’s second largest PV market and slow the rapid decrease of prices. However, IMS Research predicts that long-term damage to investor confidence and caps to the subsidy scheme will mean that the Italian market will not reach its 2010 size again in 2011.
Despite the outlook in Italy, IMS Research predicts positive growth for the global PV module market in 2011, and full-year shipments are forecast to grow by nearly 20%, driven by continued demand from new GW-scale markets, such as the USA, and continued demand from European countries. Detailed analysis of supply and demand dynamics in this market is available from IMS Research’s quarterly PV cell and module report.