Indecisive governments cause PV market bother

There are a few problems in the photovoltaic market thanks to shifting attitudes from different governments.

According to Solarbuzz, constant government policy adjustments are causing waves in sizes, growth rates and customer markets in this industry.

In three Regional Downstream PV market reports, analysts pinpoint the European market, led by Germany and Italy, as having a few problems. Solarbuzz says the two had absorbed Feed-In Tariff (FIT) rate cuts of up to one-third between January 2010 and July 2011.

And that has had a knock on effect, with the first quarter of 2011 failing to hit demand. 

The domino effect means that in the first quarter of 2011, Germany hit less than half of what it did in the same time last year.

European full year demand will stay flat this year compared to 2009 and 2010 when it rose more than 170 percent.  

It blamed government indecisiveness with PV policies, claiming these had particularly hit large ground-mount systems on agricultural land.

That said, there was some good news, as investment returns across the range of residential and commercial roof-mounted installations stayed buoyant. However, this month these too had begun to slip.

We will see a slip in PV shares in Europe, says Solarbuzz. It added that the region is predicted to hold around 65 percent of the market this year compared to the forecast 82 percent it held in 2010.

Meanwhile, the Asia Pacific and US regions will have some success, with predictions of growth over the next five years.

The US will grow from five percent to nine percent by the end of this year, while their  top five Asia Pacific counterparts – led by Japan and China – accounted for 11 percent of global demand in 2010. It said that this share will grow to 16 percent this year.

By 2015 it’s forecast that the market share of the Asia Pacific regions will continue to grow by around 26 percent. Solarbuzz also had good news for the US, saying it will see a 14 percent growth over the same period.

European distribution margins “held up better than expected during 2010 and early 2011, as project margins collapsed.” It said this caused a refocusing of business models and channels to market.

Europe benefitted from sharply lower prices during the first quarter of 2011, which had a positive knock on effect on Italian demand.

Chinese module supplier prices in Europe fell 25 percent below their European and Japanese competitors in 2010. They continued to drop throughout the year reaching a measly 10 percent in February 2011.

China sat at second place in the Asia Pacific region for demand, beaten by Japan which saw formidable 111 percent growth, driven by residential demand accounting for 82 percent of the market.

The earthquake didn’t affect this particular market because there was strong solar policy support already in place.