NPD Solarbuzz: Solar Industry Reassessing Prospects for 2012 European PV Market Following Strong Finish for 2011

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Germany Leads Resurgent European Growth Late in 2011; Other Countries Add to Buoyant Demand

Germany’s role will be critical, especially because its demand profile will be significantly smoothed by its proposed change to monthly rather than biennial tariff adjustments.

A 23% Q/Q rise in the Q4’11 European photovoltaic market has created short-term optimism in the industry, which has been amplified by the slowdown in module price decline over the past month. However, the Q4’11 demand boom will accelerate the tightening of PV incentive policies that is gripping Europe, most notably in the key German market and most recently in Spain with announcement of a moratorium on new renewable energy plants, according to the latest European PV Markets Quarterly report from NPD Solarbuzz.

Q1’12 European demand is forecast to show an increase of 10% Y/Y. Belgium, France, Spain, and Greece will have their highest quarterly shares, and the United Kingdom could accelerate into a short-term boom in Q1’12 depending on the legal ruling on incentive tariffs.

Major cuts in solar incentives and a weak project financing environment were offset by collapsing module prices, leading the European market to grow 18% Y/Y in 2011. The fact that factory gate prices fell continuously through 2011 caused developers to install as late as possible (and before the announced tariff reductions in 2012, particularly in Germany). In addition, funding scheme control mechanisms failed to react in time in major markets such as Germany, Italy, and France. Furthermore, the unusually mild autumn and early winter, especially in Germany, meant that market activity was hardly constrained by weather conditions toward year-end.

German PV Market Grows 63% Q/Q in Q4’11; PV Markets in UK and Belgium Experience Strong Rise

Germany exceeded all expectations by surging 63% Q/Q in Q4’11, but the UK and Belgium also contributed over 370 MW of growth in the quarter. However, Italy and France both dropped Q/Q due to scheme installation deadlines and flexible tariff cuts implemented throughout the year. Module prices fell 40% Y/Y at the distributor level in Q4’11, but have shown some evidence of stabilization in January 2012.

“Tier 1 Chinese module manufacturers are predicting module shortages by the end of Q1’12, but the evidence for this is not totally compelling. The path for module prices in 1H’12 will largely depend on the extent to which wholesalers are confident enough to build inventories in the face of continued policy uncertainty. Germany’s role will be critical, especially because its demand profile will be significantly smoothed by its proposed change to monthly rather than biennial tariff adjustments,” noted Dr. Alan Turner, Vice President of NPD Solarbuzz Europe.

Ground mounted installations, while down 13% in 2011, had a 35% share of the European market in 2H’11. Non-residential building mounted systems had a 55% share in 2011, while residential share rose slightly to 16%.

Downstream Companies Will Need to Develop Flexible Market Strategies

Two of the key markets in Europe, Germany and Italy, face a marked decline in 2012, with a reduction of 37% in their combined market size. The strongest growth in smaller markets over next one to two years, based on current incentive policies, will be in Austria, Bulgaria, Czech Republic, and Romania.

Two factors are triggering new growth. As incentive tariffs follow prices downward, less public funding is needed to build significant country markets. In addition, as PV becomes more competitive with retail electricity prices, investors become less dependent on public funding schemes for viable economics. As a result, new markets are emerging, particularly in East and Southeast Europe. Following two 100 MW PV plants built in Ukraine in 2011, Serbia is now planning the construction of two 150 MW plants, as well as a 1 GW project to be carried out between 2013 and 2015.

Prospects for the development of projects based on self-sustaining economics have been boosted in France, with a 60 MW project to be carried out by a major French developer based on a 30-year power purchase agreement with a local utility. Similar concepts are also being discussed in Greece at the government level. However, prospects for comparable projects in Spain have been dented by recent exposure of its very large electricity generating capacity overhang, which has reduced the impetus for capacity expansion of any sort and has culminated in a moratorium on any new renewable electricity plants.

The NPD Solarbuzz European PV Markets Quarterly report addresses the challenges and opportunities facing downstream companies in the face of slowing growth and falling prices to help them focus their marketing activities on the specific segments in certain countries that remain attractive in the near term. The data-driven report brings together a comprehensive and detailed analysis of pan-European trends, major country market analysis, and developments in smaller country markets—providing easily accessible analysis that unravels the complexity of the European markets, combined with the standard of data integrity for which NPD Solarbuzz is recognized in the industry. PV market activity over the 12 quarters of 2011-2013 in the major markets of Belgium, France, Germany, Greece, Italy, Spain, and the UK is covered in terms of market drivers and constraints, market segmentation, policy changes and their impact on the market, downstream trends, major project activity, installed system pricing and PV project investment economics. The smaller country analysis covers what is new and interesting in the past quarter in Israel, Netherlands, Portugal, Romania, Serbia, and Turkey. The European PV Markets Quarterly report includes a 200-page PowerPoint report, an Excel data summary, and PolicyTracker, which is a detailed and comprehensive searchable Excel-based incentive policy archive.

For more information or to order the NPD Solarbuzz European PV Markets Quarterly report, contact us at one of our seven global locations, email us at contact(at)solarbuzz(dot)com, or call Charles Camaroto at 1.516.625.2452 for more information.

About NPD Solarbuzz
NPD Solarbuzz, part of The NPD Group, is a globally recognized market research business focused on solar energy and photovoltaic industries. Since 2001, NPD Solarbuzz has grown its client-base to include many of the largest global PV manufacturers, major investment banks, equipment manufacturers, materials suppliers, hedge fund companies, and a vast range of other multi-nationals. NPD Solarbuzz offers a wide array of reports, including Marketbuzz, an annual global PV industry report, and Solarbuzz Quarterly, which details both historical and forecast data on the global PV supply chain. The company’s research also provides annual downstream PV market reports by region for Europe, Asia Pacific and US markets. In addition, is a recognized and respected online resource within the solar industry. For more information, visit or follow us on Twitter at @Solarbuzz.

About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit and Follow us on Twitter at @npdtech and @npdgroup.

Solarbuzz and Marketbuzz are registered trademarks of The NPD Group.

Media Contact:
Lauren Leetun, APR
SAVVY Public Relations
Phone: 407-592-7923
E-mail: media(at)displaysearch(dot)com


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