PV sector to see dramatic slowdown in capacity expansion

Nov 3, 2011 - The rapid capacity expansion in the photovoltaic (PV) industry will slow drastically over the rest of this year and the first half of 2012, IMS Research has forecast.

The market research firm said in its latest quarterly report that manufacturing capacity had grown at a frantic rate during the past two years, with global PV module capacity set to reach more than 50 GW by the end of 2011. That represents a rise of 54% since the beginning of the year and compares with a 19% increase in annual demand, which has grown to 23 GW.

Due to a significant oversupply and uncertainty over the demand outlook in key markets like Italy, Germany and UK, however, the expansion in wafer, cell and module capacity is set to suffer a dramatic slowdown. IMS Research predicts that in 2012 capacity will increase by less than 10%.

The firm noted that manufacturers were not only retrenching and putting off expansion but that a number of companies had also recently announced production suspensions or plant shut-downs.

Production capacity will still grow over the next quarters, IMS Research forecasts, though at a significantly slower rate. PV module manufacturing capacity is expected to grow by only 6% in the first half of 2012.

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