European PV demand to be more stable going forward, Chinese demand will see greater volatility

09.04.2013: Solar demand in the main European markets will be more stable and predictable over the next four quarters due to the fact that these markets will no longer be dominated by policy deadlines, predicts NPD Solarbuzz. China, on the other hand, will continue to experience volatile demand over the next year thanks to seasonality and policy incentive deadlines. Due to volatility in China, which saw PV demand fall 23% quarter over quarter to 6.2 GW for the first quarter of 2013, PV manufacturers will face new supply challenges this year. »Chinese solar PV demand was the key global driver at the end of 2012, which helped to deplete upstream inventory levels that had accumulated over previous quarters,« said Michael Barker, senior analyst at NPD Solarbuzz. »However, extreme swings in PV demand from China over the next year will make capacity utilization and inventory control particularly challenging. At the same time, demand from other global PV markets is beginning to offer predictable quarterly demand levels that are essential for long-term planning.« NPD Solarbuzz predicts that China will account for more than 20% of global PV demand over the next four quarters, with demand ranging between 0.9 and 3.6 GW per quarter. At the same time, Germany, Italy, France and the UK – which will account for over 65% of European PV demand over the next year– will see relatively flat growth from quarter to quarter. Over the next four quarters, European PV demand is expected to range from 2.7 to 3.2 GW per quarter. PV demand outside China and Europe will be driven by the US and Japan, which exhibit different phases of demand. The Japanese market is strongest during the first half of the year, while the US market is strongest during the second half. »Volatile demand swings will continue to hamper the growth of the solar PV industry over the next four quarters, with production and shipment schedules having to be adjusted each quarter,« concludes Barker. »These effects will have the most profound impact on suppliers that rely upon China as the dominant end-market for shipments. Suppliers that are focused on Europe, Japan and the US will see more stable quarterly demand trends, and will be able to plan production schedules with far greater visibility.« Source: NPD Solarbuzz LLC