Global PV Installs to grow 21 Percent in 2012

2012 Global PV Installations are forecast to rise as solar photovoltaic market demand shifts, despite incentive and feed-in tariff cuts, with Europe losing share while Germany leads, China surges, and emerging markets drive diversified growth.

Global solar PV installations will grow by at least 3.5 percent and up to 21 percent in 2012, according to a new report from IMS Research.

The market analyst firm forecasts that despite incentive cuts in most of the world’s largest markets, global installations will grow from 26.9 GW in 2011 to between 27.8 GW and 32.6 GW in 2012, with European solar power’s share of installations falling from 69 percent in 2011 to 50 percent this year.

IMS Research’s Q1’12 PV Demand Database, which tracks installations in more than 60 countries, revealed that new PV installations reached 26.9 GW in 2011 and its most-likely forecast shows this growing to 27.8 GW this year. (Note that figures are for installations and not grid connections; the figure for grid connections in 2011 would be much higher.) Ash Sharma, Senior Research Director for Photovoltaics (PV), commented, “Despite many in the industry still expecting further doom and gloom, we in fact see a pick-up in demand, and a brighter future driven by falling system prices, a rush to beat incentive cuts, and the growing number of mid-sized emerging PV markets.”

The new report’s ‘optimistic forecast’ shows installations growing by 21 percent to 32.6 GW this year, supported by expanding solar cell production across the industry today. “It is no longer a case of whether the PV market will grow in 2012, the real question now is by how much will it grow,” Sharma explained. “When you only consider a handful of countries like Germany, Italy and France, it’s easy be pessimistic about demand; however, when you look further afield and analyze demand from 60 countries, the picture becomes much more positive.”

According to the Q1’12 report, at least 23 counties will install 100 MW or more this year, up from just 17 in 2011. “It is this geographic diversification that will help drive growth in global PV installations this year as the global solar energy market becomes less dependent on just one or two markets. Ultimately it will also lead to stability for the industry in the longer term as the impact of a single country’s policy will weaken,” added Sharma.

Germany, however, is still predicted to remain the largest and most important PV market this year, with German installed PV capacity already at significant levels, and despite the overhaul to its feed-in-tariff (FiT) policy, new installations are predicted to reach at least six GW this year and up to 8.5 GW is even possible. Such a result would have been almost unthinkable a few months back, but IMS Research found that demand in the first quarter of 2012 was extremely high in a rush to beat the incoming changes.

Although Germany will remain the largest market, IMS Research predicts that China will become the second largest, followed closely by Italy, where the Italian solar goal is considered tough but reachable this year. “China remains one of the most unpredictable factors in the global supply and demand balance. With European demand faltering, the Chinese government is under increased pressure to accelerate domestic deployment to support its huge manufacturing base. Installations of up to eight GW would be unlikely in China this year, but still a possibility,” concluded Sharma.

Detailed analysis of PV installations in more than 60 countries, including why solar shone brightly in Europe in 2009, is available from IMS Research’s quarterly PV Demand Database.

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