Tuesday, April 23, 2013

Surviving the downturn until 2015

Article published on www.pv-magazine.com on April, 23rd 2013.

NPD Solarbuzz's latest report shows that a module market downturn and further consolidation are to be expected until 2014. Recovery is forecasted to begin in 2015. Surviving the downturn phase will be a key objective for manufacturers.

The Marketbuzz report states that photovoltaic industry module revenues are forecasted to fall 20% in 2013 to US$20.5 billion from $25.5 billion in 2012. However there is hope from 2015 onwards, with module revenues expected to increase and reach $32 billion by 2017.

Solar PV module supplier revenues forecast to 2017 from the Marketbuzz report.NPD Solarbuzz
Senior Analyst at NPD Solarbuzz Michael Barker stated that manufacturing overcapacity and falling revenues had a major impact on the PV sector last year and this downturn is expected to continue into this year. Module average selling prices or ASPs fell about 50% year-over-year whereas end-market demand increased by a mere 5%.
The PV manufacturing sector expanded its capacity in 2010 and 2011 with the hope of supplying 45 GW to an end-market in 2012. However 2012's end market only reached 29 GW giving rise to the overcapacity scenario.
Barker added, "Share values of several publicly listed PV companies have been falling close to delisting levels, operating losses have been reported in the hundreds of millions of dollars per quarter, and many manufacturers are continuing to file for insolvency. Predicting how and when the solar PV industry will rebound to profitability has now become essential for all industry participants."
Further consolidation
A further consolidation of the market is foreseen in the solar manufacturing sector through 2014. This can provide opportunities for market share gains as NPD Solarbuzz states. Module ASPs are also expected to continue decreasing, but at a slower rate than in the last two years. Leading module suppliers have, thus, an opportunity to implement cost efficient measures in their production steps and work towards creating a profitable environment as end-market demand pushes towards 46 GW in 2015. 
"Surviving the downturn phase of 2013 and 2014 remains the key objective for all solar PV manufacturers," Barker stated, adding, "Module suppliers with profitable business models will emerge as market leaders. In 2015, they can expect an industry that offers strong growth and revenue potential, which should restore confidence in the PV manufacturing sector and lead to further investments in new capacity and next-generation technologies."
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