PV module shipments grew for the sixth consecutive quarter to 4.4 GW in the second quarter of 2010, while channel inventory also remained extremely high at almost the same figure, according to analysis from IMS Research.
However, despite production lines' running at close to full utilization to satisfy orders for the remainder of the year, the majority of cell and module suppliers are preparing for harder times and remain cautious as to how the market will cope with incentive cuts in Germany, Italy, France, the Czech Republic and other markets at the close of the year.
IMS Research says it has shared and discussed its latest results with more than 50 major cell and module suppliers who confirmed many of the results shown and voiced concern over inventory levels, capacity expansions and anticipated weakened demand at the start of next year.
Currently, channel inventory levels are particularly high, and IMS Research estimates that at the end of the second quarter, 4.3 GW of PV modules had been shipped by suppliers, but had not yet been installed. A large percentage of these modules are not sitting in warehouses but are in transit from Asia, moving through distribution channels and installed in systems yet to be connected to the grid, the report adds.
Although inventory levels are forecast to decline in the fourth quarter after a surge in completed installations, these high inventory levels are likely to continue to affect shipments in early 2011, given the predicted slowdown in demand.
‘In the last week, we have spoken to dozens of suppliers throughout the entire supply chain,’ comments Sam Wilkinson, a PV research analyst at IMS Research. ‘Very few are reporting any visibility beyond the fourth quarter and are bracing themselves for a major reduction in demand and shipments.’
‘IMS Research forecasts that the end of 2010, which has been an incredible year for the PV industry, will be marked by over 5 GW of PV installations being connected to the grid in the final quarter alone,’ Wilkinson adds. ‘However, installations are predicted to decline by 65% sequentially during the first quarter of 2011.’
SOURCE: IMS Reasearch