The pace of the European solar photovoltaic (PV) market in the first half of 2010 was dominated by the impending mid-year incentive tariff reductions in Germany and conditioned by the lower module pricing that emerged through 2009, according to the ‘Europe PV Markets 2010’ report issued by Solarbuzz, a San Francisco-based solar energy consultancy. The report provides a detailed review of Europe's 2009 PV market and a five-year forecast.
‘Despite the strength of end-market demand, which was one-third higher in Germany in the first half of 2010 than in the second half of 2009, the first PV module price increases of 2010 only emerged in June,’ noted Alan Turner, vice president of European market research for Solarbuzz. ‘Even then, the increases in euro terms only partially compensated for the deteriorating price picture in dollar terms caused by the euro's dramatic decline against the dollar. Such is the strength of supply growth in the PV industry.’
According to the Solarbuzz report, Italy became the world's second largest PV market, with 770 MW in newly installed capacity. The Czech Republic, France and Belgium combined to add 933 MW of newly installed capacity in 2009. Growth of the total European market was just 16% in 2009, while growth excluding Spain was 126%.
The report notes that the new mechanism of tariff adjustment in Germany should be effective over the 2011-2012 period in subduing the German market. Despite this, Solarbuzz believes there remains upside potential in 2011 as European governments seek to reduce the economic burden of their national incentive programs, which will sustain pressure for continued price reduction beyond the short-term tightening around mid-2010.
‘Exposure to individual country markets remains a high risk strategy,’ Turner added, ‘The policy risks are simply too great and downstream solar companies need to look for a geographical portfolio that balances materiality and growth to secure their long-term position.’