Could PV Installations Really Have Reached 26 GW in 2011?
16 January 2012
The simple answer is yes. Certainly enough modules and inverters were sold, and if installations really did hit 7.5 GW in Germany then this would undoubtedly mean that at least 26 GW was installed globally last year, with Germany retaining its position as the largest market, followed closely by Italy. We’re still finalising our data for 2011, but we now estimate up to 26.5 GW could have been installed last year following the phenomenal year-end rally in Germany. This would have meant an incredible 10 GW was installed in the last quarter of the year – the first time this has ever happened and more than the whole amount installed in all of 2009!
As well as raising our estimates for 2011 global PV installations we’ve also increased our forecast to 26-28 GW for 2012, following the largely unexpected news of December installations hitting 3 GW in Germany, as well as better than expected performance in other key markets. Late last week, we released an extraordinary update to our clients providing updated installation data for 2011 and new projections for 2012 based on new information, which contained quite a few surprises.
Although we had been predicting 2011 installations of 6-8 GW for Germany throughout the year, the result of 7.5 GW was even higher than our most-likely scenario forecast, and much higher than every other analyst predicted. However it was also the slightly higher than expected installations in Italy, UK and China which proved important markets in determining the global outcome for 2011.
Most module and inverter suppliers will be extremely surprised at this huge market size for 2011, mainly because they didn’t see the year-end rally coming. As channel inventory was already extremely high going into Q4, there was already plenty of modules and inverters to serve the booming demand and most suppliers only saw a moderate increase (or even a decrease) in orders, as most of the action was happening further down the supply chain.
How big 2011 really was is going to remain a contentious issue. In fact, there’s not many industries that fail to agree on their market’s size by such a great margin, as there’s so many different methods of figuring out the size of true demand (installations, registrations, connections, shipments, etc…). This isn’t helped by some of the largest markets’ official statistics giving confusing and contradictory accounts of how much was actually installed in the prior quarter or year. Italy’s GSE for example still shows a 2010 market of both 2.3 GW and 5.8 GW for the same year in their reports! Based on our analysis of what could have really been physically installed in Italy in 2010, leads us to installations in the country of 4.4 GW in 2010 and a huge 7 GW in 2011.
The UK was another market to take many by surprise. We were considered bullish when we said back at the start of 2010 that at least 250 MW would be installed in 2011 due to the new tariff. Many were surprised by our prediction and disagreed the UK would grow this quickly. I even accepted a bet with the CEO of a major manufacturer who said this would never happen when he called me up on the prediction in late 2010 (you can’t not like a bet when involved in predicting the PV industry!). Now we’re finishing up our analysis of the UK market and we’re estimating around 800 MW was in fact installed here last year – quite an incredible feat!
So what does 2012 hold for the PV industry? Well, we consider flat shipments of another 26 GW as being probable, but we also see upside potential of up to 29 GW of new installations this year. On the other hand, some downside potential also exists. How successful 2012 turns out largely depends on what the German and Italian governments do now – it is clear that way more PV capacity was added than they had budgeted for; and what the Chinese (both the suppliers and the Government) do in response.
It is also clear that 2011 was another record year for the industry with an almost unthinkable amount of new capacity added – it just shows what a big difference a mild winter in Europe makes to the PV industry –perhaps we will need to start forecasting the weather as well as the decision-making of politicians!
Written by Ash Sharma
Senior Research Director at IMS Research