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Solar Panel Glut to Continue into 2012

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SAN FRANCISCO, Oct. 4, 2011 — A recent Solarbuzz Quarterly report suggests that overproduction is continuing to take its toll on photovoltaic (PV) module prices. Factory gate prices are said to be down 33 percent year-on-year, and it is projected that they will fall a further 18 percent in fourth-quarter 2011.

Global PV Demand and Cell/Module Inventories.

The market research company warns that failure to cut back production will result in soaring module inventory levels to almost 22 GW by the end of next year and adds that, to maintain the same level of inventory days as projected for the end of 2011, forecast production would need to be cut back by approximately 11 GW.

“Anticipating that falling prices could stimulate demand by year-end, downstream companies across Europe face the unnerving decision of whether to build inventories at the end of the third quarter of 2011,” said Craig Stevens, president of Solarbuzz. “Any overestimate of that demand ahead of an expected 15 percent German feed-in tariff reduction at the start of 2012 would likely result in further year-end inventory write-downs.”

The report suggests that European markets are projected to account for 58 percent of third-quarter 2011 global demand, down 78 percent from last year. The US and China, on the other hand, are seeing the fastest rates of growth among major markets in that period.

Heading into 2012, the industry is braced for another challenging year. Analysis in Solarbuzz Quarterly shows manufacturers are preparing to raise cell capacity by 50 percent over 2011 levels, while end-market demand is forecast to increase by less than half that level, further adding to market woes.

“This is a strikingly similar equation to the supply/demand balance that existed 12 months ago and resulted in collapsing prices through the PV chain,” Stevens said. “In contrast, though, margins are already at a breaking point, thereby increasing the likelihood of more company consolidations and liquidations next year.” (See also: Solyndra Execs Take the Fifth)

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Oct 2011
AmericasAsia-PacificBusinessCaliforniaCraig StevensenergyEuropegreen photonicsMiddle EastphotovoltaicsPV marketsolar cell marketsolar panel productionSolarbuzz Quarterly

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