USA: Newly connected solar photovoltaic (PV) capacity in Germany soared to 1.46 GW in December, almost three times the previous record rate of monthly connections of 0.50 GW set in November. This means that 38 percent of 2009 PV grid connections in the country were recorded in the final month of the year.
As a consequence of this late surge, the 2009 PV market in Germany reached 3.87 GW and the global PV market rose to 7.30 GW, up 20 percent on prior year installations. This is an increase of 0.87 GW on the previous Solarbuzz 2009 market size determination.
According to the latest edition of the Solarbuzz QUARTERLY report, Germany accounted for 63 percent of global demand in fourth quarter, taking into account the new program statistics released last week.
Fourth quarter 2009 global PV market reached a record high. At 3.73 GW it was more than seven times larger than in the first quarter of 2009, following massive growth in European demand through the year. In addition to Germany, the end-market ramp in the final quarter was also strongly driven by Italy and the Czech Republic.
The sharp rise in German demand in 4Q 2009 not only sets the platform for strong first-half 2010 global demand, but it also exacerbates the pressure on the German government to respond. At approaching 4 GW of newly connected capacity in 2009, the German market is running well ahead of the 2.5-3.5 GW per annum path specified in the currently proposed amendment to the Renewable Energy Act (EEG).
"The current EEG policy amendment is based on a target market range that will be overshot by a large margin in 2010, so the Government may yet choose to cut back tariffs mid-year even more aggressively than currently planned." said Craig Stevens, President of Solarbuzz, a part of The NPD Group.
"Even without such revision, the PV industry will need to plan on a major re-balancing of global supply and demand in both mid-2010 and the start of 2011, worse than occurred from the policy adjustment in Spain in 2008."
For the moment, early 2010 market strength is creating a period of relative pricing stability compared to the 2009 turmoil. Having fallen 22 percent between first and fourth quarter 2009 after the decline of the Spanish market at the end of 2008, crystalline silicon module factory-gate prices are projected to show a slight upturn in Europe through most of second quarter 2010.
Once German policy adjustments have been implemented, second half 2010 and early 2011 corporate outcomes will become dependent on the discipline of downstream companies to manage inventories and on the manufacturers to adjust production levels in line with shifts in the quarterly demand pattern.