Interview with Henning Wicht, Senior Director and Principal Analyst at iSuppli

What are your expectations for the German PV market in 2010?

We expect that in 2010, PV installations will again hit a record in Germany. Experience from Spain in 2008 and Germany in the second half of 2009 indicates that the German market could grow by 100% in 2010. We expect that six to seven GW will be installed in 2010. The iSuppli current forecast is 6600 MW (up from 3800 MW in 2009).

The main market drivers are:

• Attractive investment conditions; very attractive investment conditions in the first six months of 2010, ROI of 10% and more. Following the cut in FIT in the second half of 2010, we are still seeing attractive investment rates for all roof-top installations with self-consumption (8-10%).
• Well established market and large installation capacity (800 – 1000 MW per month).
• Demand pull in the first half of the year since FITs are expected to be reduced mid-year and at the beginning of 2011.
“Every day, we anxiously await new data from the monthly installation report published by the ‘Bundesnetzagentur’ (German Grid Agency). So far, our forecast looks fine and is in line with the published data for January and February. But the exciting time is now.”

What are your expectations for the Global PV market by 2013?

We expect a fast growing market in 2011, reaching up to 20 GW of new installations globally. Germany, Italy and the USA will be the leading markets. In our scenario, we’ll see a dip in 2012. It is Germany which is supposed to reduce its FIT tariffs, ultimately targeting the corridor of 3.5 GW of new installations. In 2013 and 2014, we expect installations to increase more rapidly, and shift to regions outside of Europe. For 2014, we expect that approximately 50% of new PV Systems will be installed outside of Europe.

What do you expect to become the major markets by 2013? Do you expect market demand to shift from European domination towards Asia and the USA in the next three years?
We expect Italy to overtake Germany as the leading market, placing Germany in second position. The USA, France, Japan and China will follow. We also expect numerous countries to start offering solar incentives, which are not yet visible today.
Indeed, we expect the markets to shift, although Europe will still attract approximately 60% of all installations.

What module price development do you expect in this and next year? Will the ASP for c-Si modules hit €1/Wp in 2011?

Module prices remained stable in the first half of 2010, varying between €1.40/W for lower priced Chinese products and €1.9/W for European products. We forecast that module prices will drop slightly in the second half of 2010, to compensate for the FIT cut in Germany. There are still two reasons supporting stable prices: a strong year-end rally in Italy, and France stabilizing prices. In addition, the weakening euro is hindering Chinese suppliers from applying lower prices.
For 2011, we do not yet expect ASPs of €1/W for modules.

What is the potential impact, and for which major PV companies, if the German Government seriously intends to decrease or even stop the FIT for ground-based PV systems?

As recently confirmed, the German FIT will not support PV on agricultural land. At first sight, this amendment addresses the preferred market segment of First Solar and other thin film (a-Si; tandem) suppliers. However, ground installations on conversion and non-agricultural land are still included in the funding. I believe that thin film suppliers and EPC are able to address these areas, however permits and planning will probably take longer, thus the ground installations segment risks a slow-down compared to the fast-growing rooftop segment.

What do you see as the most important market segments for the near future: residential, commercial, or utility-scale projects?

Rooftop systems will make up 80% of installations in 2010 and 2011. It is the USA which is driving the utility-scale segment, and will achieve high volumes from 2013 on. How can solar PV compete with concentrated solar power plants on utility-scale PV projects in potential markets such as the USA, India, Spain, China, and elsewhere? CSP and PV will compete with and also complement each other on utility-scale plants. PV systems are more flexible in terms of size and location, they need less maintenance, and may even offer a lower capital investment cost per watt. The advantages of CSP systems are that they store energy, providing a continuous supply and very large scale operations; this makes them similar to traditional power plants.
The choices to be made by the Desertec project will show which technology is able to forge ahead. It is a good sign for PV that First Solar recently joint the Desertec initiative. Other PV companies could do the same to secure the role of PV in utility-scale projects.

What do you see as the major trends and drivers for solar energy in the coming decade?

There is no doubt that the world energy scheme is transitioning from fossil fuels to renewables. Germany is a prominent example of democratizing solar: I roughly estimate that approximately 10% of residential rooftops are now covered with PV panels, compared to 5% in 2008. PV systems for residential, commercial and ground installations will continue to penetrate.
For a longer term outlook (2015), I consider that two elements will provide a boost to solar energy: electrical vehicles and Desertec. Electrical vehicles fuelled by REE will need public funding support, but will form the major shift to REE, leaving the age of petrol behind. By 2015, the Desertec industrial group will be supplying electricity to Europe from prototype utility-scale sites in Africa. Desertec will open up another solar market segment of very large-scale power plants far from the point of consumption. Similar projects could be built in Australia, North/South America and China.