EnergyTrend: Global Solar Energy Market Demand to Keep Growth in 3Q

According to EnergyTrend, a research division of Trendforce Corp., the solar energy industry remains the buyer’s market in the short term, so the market demand will directly influence the industry growth. As the European market with feed-in tariff policies still takes up over 50% of the global market, EnergyTrend believes that global solar energy market will keep growth in 2010 Q3.

The amended feed-in tariff scheme has been unanimously passed by German Federal Parliament. Based on the new plan, the 16% feed-in tariff reduction for the Rooftop System, which was supposed to take effect on July 1^st, will be introduced into two phases: 13% decrease in the first phase from July 1^st and another 3% decline in the second phase from October 1^st. In addition to the mentioned system, the new policy also covers the Ground Mounted System and the Utility Market System. In the first phase, the feed-in tariff rates will drop 12% for the Ground Mounted System and 8% for the Utility Market System followed by 3% cuts for both systems in the second phase.

In EnergyTrend’s opinion, as the new feed-in tariff scheme is less aggressive than the original one and it is in 4Q that the feed-in tariff will be reduced by 16%, 3Q installations will be promoted. EnergyTrend further estimates that the installation in German market can be lifted from 1.5GW~2GW to 2GW~2.5GW in 3Q. In view of 4Q installations, although part of the demand will advance into Q3, rush order effect will still occur under the impact of next year’s German feed-in tariff cuts. In this case, EnergyTrend predicts 4Q installations to be 0.6GW~0.8GW and 2H10 installations to be 2.6GW~3.3GW. Besides, according to EnergyTrend’s survey, German solar energy market shows a phenomenal growth in the first half of the year with installations estimated around 3GW. Hence, EnergyTrend has raised installations in 2010 German market to 5.5GW~6.3GW.

Regarding the rapid growth of the 2010 German market, EnergyTrend considers it as negative for the short term development of global solar energy market. For instance, in 2008, the Spanish solar energy market expanded fast into 2.5GW but froze quickly in 2009. The great fluctuation of the single market demand plus the financial tsunami resulted into almost zero growth of the solar energy market in 1H 2009.

According to EnergyTrend’s interviews, manufacturers think that the development of German market is unlikely to run out of control like the 2008 Spanish market. However, in light of further feed-in tariff cuts in Germany, Italy, Spain and France next year, they hold a conservative attitude toward the market demand for the first half of next year. 　

German Feed-in-tariff Policy Implementation Plan

Source: EEG, compiled by EnergyTrend; July 10, 2010

Ps. 8% reduction dating from Jan 1, 2011 is assumed