Market Analysis May 2014 - Is PV still a model for the future in Europe? The current situation casts doubt on that

Once again we have a month behind us during which there has not been much change in the market. There is still a very prevalent “wait and see” attitude in Europe and in Germany in particular. Following fixing of the new minimum import prices, prices in general dropped by around €0.03 per watt peak ($0.04).

Now at least the average prices for Chinese goods have been firmly fixed again at around €0.56/Wp ($0.77), but there was no recovery at all in the market following the price cut. There still exists a subdued mood coupled with sheer amazement that politicians are still sticking to their plan of letting the PV industry die.

Once again the German Federal Network Agency (Bundesnetzagentur) announced a significant drop in the figures for newly installed capacity compared to the previous year, which generates concern that the 2 GW limit in Germany will not be reached by the end of the year – a dramatic slump in what is essentially still a high potential market. There is hardly any space left for the large number of players. This is probably what the decision makers at Saint-Gobain and Schueco would have said to themselves when they decided to get out of PV. The sudden departure of two more conglomerates hit not just their steady customers in recent months.

From a global perspective, the situation is very uncertain, but there are also rays of hope. Solar module manufacturers JA Solar, Canadian Solar, Kyocera and First Solar have managed to increase their net result in the first quarter of 2014 following increased sales and they have even revised their sales forecasts upwards for the whole year. Even silicon producers such as Wacker and GCL reported rising sales and announced increases in capacity. While the price for silicon mid-April was still on average $21.75 (€15.70) per kilogram, it could well climb above $25 (€18) soon. The silicon price is currently at the same level as it last was in mid-2012.

According to EurObserv’ER barometer, in the United Kingdom – Europe’s fourth largest PV market in 2013 – 1,085 MW installed PV capacity was added in the first quarter of 2014, which is more than the installed capacity (1,030 MW) for the whole of 2013. In the U.K., green-field installations account for 78% and roof-mounted systems account for only 22% of the installations. In turn, two thirds of the rated output of the green-field installations are located in large-scale PV plants (larger than 10 MWp). Hence, this segment has increased dramatically in the British Isles.
Unfortunately, the celebration of the boom is probably not last long - the British government is already planning sharp cuts or even a setting of the Renewable Obligation Certificate (ROC) scheme for large PV systems by April 2015.

According to recent forecasts, 44.5 GW of PV capacity could be installed worldwide over the year which would correspond to an increase of 21% over 2013. Unfortunately, this trend is occurring in spite of and not because of the European market. It appears that not only the German government but also the EU Commission would like to put the brakes on the installation of photovoltaics. Brussels is advising that subsidies in this sector should be curtailed in general and that financial support should be reduced to a minimum. The facts regarding illegal grants within the German Renewable Energy Act (EEG) are still under investigation. At the same time, however, nuclear companies are claiming government aid to relieve themselves of incalculable risks at the taxpayers’ expense. Surely not!