MORE SOLAR MODULES & LOWER SOLAR PRICES

Production Cutbacks Insufficient to Prevent Solar Module Inventory Buildup; Current Production Plans and Demand Outlook Suggest Oversupply Will Be Maintained into Next Year
September 26, 2011 (solarbuzz)

"Continued solar module overproduction will lead to sustained price pressure across global photovoltaic (PV) markets, already reeling from factory gate prices now down 33% Y/Y…

"Preliminary analysis from Solarbuzz shows Q3'11 global demand growing by less than 1% Q/Q, but up 20% Y/Y. European markets are projected to account for 58% of Q3’11 global demand, down from 78% in the same quarter last year. Among the largest PV markets, the US and China are seeing the fastest rates of growth among major markets in Q3’11."

from solarbuzz - click to enlarge

"While some manufacturers have started to cut back their production and shipment plans, tier-one Chinese companies have maintained their full year shipment guidance. If manufacturers meet their 2H’11 guidance, global shipments are forecast to exceed end-market demand by 4.4 GW.

"Price cuts have started to stimulate 2H’11 end-market demand, but to date, this has occurred more slowly than expected…[D]ownstream companies across Europe face the unnerving decision of whether to build inventories…Failure to cut back production will result in soaring module inventory levels to almost 22 GW by the end of next year. In order to maintain the same level of inventory…production would need to be cut back by approximately 11 GW…"