The photovoltaic (PV) module market is due for a period of strong growth this year and into 2016 after a new wave of capacity expansions, stable pricing and an increased demand from established markets is accelerating shipments and boosting revenues, according to a new report from IHS.
Global revenue for PV modules is forecast to hit $41.9 billion in 2016, exceeding the previous record for revenues set in 2010 by as much as 4%, IHS says. Module shipments are expected to exceed the 2015 level of shipments by 10% in 2016, and in the fourth quarter of 2015 shipments will rise 29% year-over-year reaching 18.7 gigawatts (GW) in the quarter.
Solar module revenue is expected to hit a record high in 2016. Source: IHS“Compared to prior years, this period of strong growth in solar installation demand, coupled with tight supply, will support relatively robust pricing,” says Edurne Zoco, senior principal analyst for IHS Technology. “In fact, average annual prices are forecast to decline significantly less than in previous years.”
However, beginning in 2017, things are set to change. In the U.S., the PV module market is forecast to experience a significant decline in 2017, following the reduction of the federal investment tax credit (ITC). This reduction to the ITC will contribute to a fall in the global demand for PV modules with prices forecast to decline by 9%, IHS says.
Zoco says that this year and next year will mark a climax in the recovery of the solar PV sector after a period of intense price reductions and margin compression.
“Even so, the predicted slowdown in global demand in 2017—on the back of a decline in the United States—is likely to challenge these suppliers once again, since manufacturing capacity additions are set to dangerously outpace industry demand,” he says. “Competition will intensify, which will lead to accelerating declines in prices and gross margins, for the first time since 2012.”
Questions or comments on this story? Contact engineering360editors@ihs.com
Related links:
PV Module Intelligence Service
News articles:
Building a Giant, Self-Tracking Solar-Powered Oven
Chinese Solar Suppliers Still Dominate Module Market
