Improving market conditions have led market research firm IHS to upwardly revise its forecasts for global expenditure on solar PV equipment for the year 2014. IHS had originally projected that PV component manufactures would spend 37% more on production than they did in 2013; they now believe expenditure will increase by 42%–with a total of around $3.3b to be spent in 2014.
Manufacturers of silicon ingots, wafers, solar cells, solar modules have been suffering across the board over the past 2 years or so, mainly as a result of global oversupply of these items. Although GTM Research predicted in 2012 than this glut of stock would last until 2015, it seems that demand will begin to catch up with supply as early next year, with companies who are currently outsourcing manufacture of some of their components (mainly wafers and cells) instead beginning to once again invest in expanding production internally. This would signal a return profitability for the world’s largest solar module manufacturers, who have almost all been consistently posting losses through the recent doldrums.
Much of the drop in solar PV system installation prices over the past few years has been attributed to the aforementioned glut of solar panel stock, which drove an unprecedented degree of competition between solar module & other solar component manufacturers. Although manufacturers suffered, end-users benefitted substantially from the lower prices.
In Australia, the glut began as some of the most generous government subsidies for renewable energy that the country has seen were being cut back, acting as something of a buffer for the country’s nascent solar industry. These incentives drove a massive boom in solar system uptake among homes, and contributed substantially to Australia’s reaching the 1 million solar homes milestone earlier in 2013.
Solar uptake in Australia since the withdrawal of the incentives has taken place on the back of the cost reductions associated with the oversupply & competition between system installers. Thanks to the reduced cost (prices in Australia are among the lowest in the world for residential & small-scale solar systems), solar system installations have carried on on at relatively steady rates even after most of the subsidies have disappeared.
© 2013 Solar Choice Pty Ltd
He is now the communications manager for energy technology startup SwitchDin, but remains an occasional contributor to the Solar Choice blog.
James lives in Newcastle in a house with a weird solar system.
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