+ 10.03.2010 + It has been a rollercoaster ride for PV since 2000. Here are the highs and lows and an analysis of where the sector stands as it enters a new decade of opportunities and challenges. By Paula Mints, Navigant Consulting

The year 2000 began with Germany passing its renewable energy law, which established the first feed-in tariff and set the stage for the most profitable and highest growth decade in the 35 year history of the terrestrial solar industry. At the end of 2009, a cumulative 20.6 GW had been sold into the market – 95% of this, or 19.6 GW, in the last 10 years, mostly into grid-connected application.

Between 2000 and 2009, shipments to the first point of sale in the photovoltaic industry grew by a compound annual rate of 39%, and from 2004 to 2008 (boom years for PV), shipments grew by a compound annual rate of 51%. The last decade moved fast, took the industry to new heights and was a rocky, wild ride. It was a ride, however, that moved the industry to a new stage of growth and global acceptance as an energy source.

2009: The Year Pricing Became an Extreme Sport

For a while – four years as a matter of fact – cell and module prices went up, up, up, as the industry continued to promise that grid parity was just on the horizon. Then the industry slammed into 2009’s soft demand and prices went down, down, down, taking margins along with them. For most of the year the industry searched frantically for a new market to take the place of Spain, and for financing when a new market was found. The global recession took a heap of blame for a hard 2009, but it was only part of the problem (though, certainly not a trivial one). Manufacturers idled capacity in order to stop adding to already significant inventory. On the good news front, silicon feedstock was plentiful...

Supply and Demand ... the Age Old Partnership

The industry’s supply and demand picture continues to be unhealthy, with one major market, Europe. Viewed through a micro lens, if a company has one client consuming over 50% of its products and that client discontinues its business, unprofitability ensues. In 2009, Europe was 79% of global sales (with Germany consuming about 60% of the 5.8 GW shipped into the market). The PV industry continues to have a fragile demand/supply picture and the necessity to develop new markets remains crucial. Should Germany make significant changes to its tariff in 2010, the industry would not have another gigawatt market available to consume product.

Currently, there is industry lobbying in German aimed at forestalling significant decreases to the tariff in 2010, and so the government may bow to pressure. But then again, maybe not. For the global solar industry right now, anxious week after anxious week passes with no definite decision along with proliferation of rumours about the future of the German programme...

The complete article is available here

Renewable Energy World Magazine |  Paula Mints 2010