Market research company iSuppli predicts that the global PV market will expand next year despite reduced government incentives in some European and other countries.
Overall, reduced prices for solar power panels are expected to boost the industry with global installations predicted to total 20.2 Gigawatts in 2011. Even in Germany and Italy where incentives via feed in tariffs have been significantly cut, return on investment is predicted to be in the 8-10% range.
iSuppli’s de Haan said “iSuppli believes 2012 will be the year when the PV industry weans itself from the generosity of German subsidies …The German market will cool off and expand by only 4 to 5GW per year for the next several years. We believe the government aims to keep an orderly progression in order to achieve an ultimate goal of around 80GW of installed PV capacity.”
Although cuts in government feed in tariffs have had an impact in some countries, new incentives have appeared in others such as the UK.
iSuppli says the feed in tariff (FIT) cuts in some european countries will make the UK market more attractive to PV suppliers. The currently higher UK PV material and installation costs are also expected to come down potentially creating a boom in solar interest. The danger is that if solar does expand rapidly in the UK, the public will start to realise how much it is costing via the FIT leading to a sharp reduction in the rate. This is one of the down-sides to feed in tariffs, particularly those benefiting from rates substantially above standard electricity prices. The end result can mean a boom and bust market rather than a sustainable one attracting long term players.