As European economic outlook remained stagnant, the industry hoped European Central Bank’s Monetary Policy Meeting held in early August could come up with a solution for the European debt crisis. However, ECB did not lower the interest rate as expected, nor did it announce any specific policy, which ushered in uncertainty for the European economy. Solar industry, by its very nature, relies heavily on the government subsidies. Therefore, the industry is severely affected by the sluggish outlook. According to EnergyTrend, the green energy research division of TrendForce, certain investment projects in Europe have either been postponed or come to a halt due to a lack of fund.
Based on the statistics, growth momentum for European market in 1H12 was still there – the 1H12 solar installed capacity for Germany reached 4.3GW. Moreover, due to the climbing electricity price and declining solar system cost in Europe, certain areas of Germany and southern Europe have reached grid parity. Solar power prices in certain regions are reaching grid parity as the solar power generation cost continues to drop, which will trigger demand for replacement energies. However, under the current economic circumstances, the actual orders have yet to reflect the potential demand. Related manufacturers noted that although certain areas of Europe have achieved grid parity, the industry is still pessimistic about the 2H12 outlook for the European market due to the bleak economy and the fact that banks now hold more firmly to the funds. Related companies indicated that growth momentum for the European market may not pick up in the short run due to the current downturn, but once the economy begins to look up, Europe may see a sharp upswing on account of solar grid parity.