By Gina Roos
Courtesy of Green SupplyLine (10/02/2008 11:07 AM EDT)
New York, N.Y. — Despite projected oversupply in early 2009, leading to significantly lower average selling prices (ASPs), the global solar market will reach $100.4 billion in 2013, up from $33.4 billion in 2008, according to the latest report from Lux Research.
According to Lux, the solar market is poised for continued impressive growth, with new installations increasing nearly five-fold from 2008 to 2013. However, starting in 2009, supply will exceed demand, leading to price decreases. This change will transform the solar industry, creating a market where sales grow dramatically, but it is increasingly difficult for companies to profit, according to Lux’s report entitled “Solar State of the Market Q3 2008: The Rocky Road to $100 Billion.”
The report also indicates that falling prices will trigger an industry shakeout with the weakest players either being acquired or failing, and remaining solar manufacturers facing margin pressures for years due to a booming supply build-out. Lux also indicates that companies involved in lower cost thin-film technologies will be better positioned to weather the price reductions, and those without differentiated technologies will be at risk.
Key findings show that that driven by aggressive capacity expansion and the increasing availability of polysilicon, the solar market will grow 48% annually through 2013, reaching 23 gigawatts (GW) from 4.9 GW in 2008. In addition, cuts to government subsidies and aggressive ramp schedules will push the market into oversupply in 2009, when 7.9 GW of modules will be installed.
In Europe, the Spanish market will be limited by subsidy caps and the markets in France, Italy and Greece, will be slower to develop than expected. In Germany, which is the largest solar market today, according to Lux, years of strong investment in renewable energy such as solar and wind will push the market closer to the limits of grid infrastructure, which can only handle roughly 20% of intermittent renewable sources. As Germany approaches this cap in the next five years, growth will be limited to an average of 16% annually through 2013, according to the report.