Date: 22/09/2010

Global solar photovoltaic demand up by 54% in Q2'10

According to a report by Solarbuzz, an international solar energy market research and consulting company, the Q2'10 global solar photovoltaic (PV) demand has risen to 3.82 GW, up 54% Q/Q, following a weak start in 2010. The Q2'10 global solar PV market demand was 2% less than the global market's previous quarterly peak (3.92 GW in Q4'09) in 2009. The PV industry remains on target to deliver over 15 GW installations in 2010.

"The rush to install in Germany ahead of tariff declines in mid-2010, combined with strong incentive programs across Europe (especially in Italy, France and the Czech Republic) and an improved financing environment, drove the global PV market over three times the level in Q2'09," noted Craig Stevens, President of Solarbuzz.

Solarbuzz also reports that the total industry revenues were estimated to be approximately $17.2 billion in Q2'10, compared to $12.0 billion in Q1'10 and $6.2 billion in Q2'09. Germany, at 2.30 GW, accounted for 60% of global demand in Q2'10. Germany was followed by Italy, which grew 127% quarter on quarter, was still just 11% of the size of the German market. France and the US also put in strong performances.

On the supply side, polysilicon, wafer, and cell manufacturers reached capacity utilization rates of between 75% and 87%. Despite an increase of 495 MW in wafer supply over the past quarter, wafer capacity represented the most constrained part of the industry chain.

The top five solar PV cell manufaturers were First Solar, Suntech Power, JA Solar, Yingli Green Energy and finally Trina Solar. Among the Top 12 cell manufacturers in Q2'10, six Chinese manufacturers accounted for 55% of shipments, up from 43% a year ago.

Solarbuzz also reports that both upstream and downstream module inventories in MW terms held almost perfectly steady at the end of Q2compared to the prior quarter end.

After six quarters of declines in factory gate prices, there were modest rises in short term contract prices in Europe. However, weighted average factory gate modules prices are still down 24% in US dollar terms from one year ago . First-tier Chinese cell and module manufacturers that had priced competitively in the first six months of the year moved in to a forward sold position, which, in turn, allowed European factory gate prices to rise 2-4% by the beginning of Q3'10. A strong yen is helping to ensure that Japan remains one of the best markets to place product.

Solarbuzz also reports that the Q1'11 wil be the most challenging quarter. European markets such as Germany, will face large reductions in tariffs at the beginning of the year. The market demand is projected to be less than 50% of module production according to Solarbuzz. Therefore the analysis forecasts end Q1'11 upstream and downstream module inventory days to increase significantly by the end of that quarter.

"Historically, the PV industry has often exuded over-optimism in the face of uncertain end-markets. However, the recent industry conference in Valencia confirmed two prevailing industry positions, one that emphasizes oversubscribed order books, the other that focuses on the German tariff declines and a demand reduction next year," Stevens c