Although global capital spending this year in the photovoltaics (PV) supply chain is expected to fall to its lowest level since 2006, indications signal that the downturn in investment has hit bottom and that purchases of equipment may soon rebound.

Capital spending among PV companies is set to drop to $2.3 billion in 2013, down 36 percent from $3.6 billion in 2012, according to the PV Manufacturing & Capital Spending Tool from information and analytics provider IHS (NYSE: IHS).

The anticipated fall will represent the lowest level of spending since $2.4 billion in 2006. It also marks the second year of decline after the market peaked in 2011, as spending plunged by 75 percent in 2012. However, capital expenditures are expected to rebound in 2014, rising 30 percent to $3.0 billion.

“Companies across all nodes of the PV business have been lowering utilization rates and letting manufacturing lines go idle for the past year and a half,” said Jon-Frederick Campos, solar analyst at IHS. “PV firms have been doing this in an effort to counter overcapacity and mitigate declines in average selling prices (ASP). This phenomenon resulted in a major plunge in spending on new manufacturing equipment in 2012 and so far in 2013.  But with prices stabilizing and manufacturing on the rise in some segments of the PV market, signs are appearing that that the drop in capital spending may be coming to an end.”

The supplier base for photovoltaic (PV) inverters further fragmented in 2012, with the total market share of the 10 largest suppliers falling by more than 4 percentage points, according to the latest quarterly report from IMS Research, now part of IHS Inc. (NYSE: IHS).  

This was partly due to strong growth in demand from China and Japan, where most of the Top 10 largest suppliers have limited presence. SMA Solar Technology’s share of global revenue fell for the third consecutive year to slightly more than 25 percent—as the PV market continued to fragment and demand for its products weakened in its core markets. A flurry of recent M&A activity, including Advanced Energy’s acquisition of REFUsol and ABB’s purchase of Power-One, also has had little impact on the competitive landscape and has resulted in only minimal changes to the supplier rankings.

The worldwide market for PV storage is forecast to grow rapidly to reach $19 billion in 2017, from less than $200 million in 2012, according to a new report entitled ‘The Role of Energy Storage in the PV Industry’ from IMS Research, now part of IHS Inc. (NYSE: IHS).

Following the introduction of an energy storage subsidy in Germany, global installations of PV storage systems are forecast to grow by more than 100 percent a year on average over the next five years, to reach almost 7 gigawatts (GW) in 2017 and worth $19 billion. Germany will account for nearly 70 percent of storage installed in residential PV systems worldwide in 2013.However, opportunities also will exist in other regions and applications in the future and Germany’s share of the global market naturally will fall as a result.

The attached figure shows the IHS forecast for global PV storage system market revenue.

Energized by a surge of shipments in Asia, the global photovoltaic (PV) inverter market in 2012 bucked weak worldwide solar industry conditions to expand by 5 percent and break the $7 billion level for the first time.

Global PV inverter market revenue last year rose to $7.1 billion, up from $6.7 billion in 2011, according to the latest PV inverter market report from IMS Research, now part of IHS Inc. (NYSE: IHS), as presented in the attached figure.

“Despite lower PV installation growth and rapid price declines, inverter sales have managed to generate growth, all be it at just low single-digit levels—a notable achievement amid such weak market conditions in the solar market,” said Sam Wilkinson, PV inverter research manager for IHS. “Growth was driven by a strong increase in sales in Asia in the fourth quarter, which managed to offset a sequential decline of more than 20 percent in the Europe/Middle East/Africa region (EMEA). This helped to drive annual shipments to 31 gigawatts (GW) in 2012, up from 27 GW in 2011.”

Revenue growth was somewhat restrained by intense price competition and a shift toward more sales in lower-price markets such as China, India and Eastern Europe. These regions tend to prefer larger inverters that have lower prices, driving a significant decline in average blended pricing and resulting in much more modest revenue growth for the year.

Global photovoltaic (PV) installations are forecast to exceed 35 gigawatts (GW) in 2013, equivalent to growth of 12 percent, according to recently released analysis from IHS (NYSE: IHS). IHS also reaffirmed its earlier prediction that global PV installations surpassed 30 GW in 2012, with final analysis showing that installations, in fact, grew 14 percent to reach 31.4 GW last year.

These findings and the latest PV demand projections for 2013 and beyond were recently issued by the IHS solar team, which comprises analysts from the IHS acquisitions of IMS Research, iSuppli, and Emerging Energy Research. Contrary to many other more pessimistic predictions for the industry, IHS foresees the PV industry to continue along its double-digit growth path in 2013 and to exceed 35 GW for the first time.

“We often see quite pessimistic forecasts at the start of each year for PV installations, due to a seasonal slowdown and talks of major incentive cuts as Europe reassesses its PV policy typically after yet another year of record growth,” said Ash Sharma, senior director of solar research at IHS. “However, our analysis of more than 60 countries around the world shows that demand outside of Europe will more than compensate for the fall in the Continent, and installations will go on at any rate to hit 35 GW this year.”.

Suntech Power’s epic plunge from solar module dominance to bankruptcy comes as the result of misplaced investments, a misguided pricing strategy, antidumping action in the United States and a potential new willingness by the Chinese government and banking system to cast off detrimental manufacturers, according to the IHS Solar service at information and analytics provider IHS (NYSE: IHS).

A new survey conducted by IMS Research – now part of IHS Inc. (NYSE: IHS) – of more than 400 global photovoltaic (PV) inverter customers has revealed a rapidly growing need for energy storage in PV systems. Despite the infancy of the energy storage market, nearly one third of respondents indicated that they expect to be using energy storage in over 40 percent of the PV systems they install by 2015. The recent survey of global installers, system integrators and wholesalers also revealed that Chinese PV inverters are gaining acceptance and that the high price of microinverters is the main barrier to them gaining share.

Global photovoltaic (PV) installations will rise this year in a continuing pattern of solid growth, but the industry will nonetheless suffer a decline in overall revenue due to lower volume growth and decreasing system prices, according to an IHS Solar white paper from information and analytics provider IHS (NYSE: IHS).

After a disastrous third quarter of 2012 featuring extremely low factory utilization rates across the entire photovoltaic (PV) supply chain, a surge in demand was seen in the final quarter of the year for PV modules. A new PV module shipment record of 11 gigawatts (GW) was reached in the fourth quarter according to the IHS Solar Integrated Market Tracker from information and analytics provider IHS (NYSE: IHS). Despite this positive sign the situation of the global PV industry remains critical and a substantial recovery of the supply-demand balance is not expected to occur before the second half of 2013.

Emerging markets are forecast to help bring stability to the ailing solar industry, with up to 12 gigawatts (GW) of new photovoltaic (PV) capacity added in 2017 up from just 1.6 GW in 2012, according to a new IHS solar report. The recently released study, which evaluated the potential for PV additions in 40 countries around the world, found that up to 30 GW of cumulative PV capacity will be added in emerging markets over the next four years, helping to stabilize the industry amidst a raft of incentive cuts in core European markets.