Solar module oversupply to lead to 22 GW of inventories in 2012

Oct 10, 2011 - Solar module inventory levels will reach 22 GW globally by the end of 2012 if overproduction continues, industry analyst Solarbuzz projects in its quarterly report.

According to the report, manufacturers plan to boost cell production capacity by 50% on the year in 2012, while end-market demand is expected to grow by less than half of that level. Solarbuzz suggests the planned production capacity to be cut by 11 GW in order to keep the same inventory level as forecast for the end of 2011.

Continued module overproduction will result in continued price pressure in photovoltaic (PV) markets globally, with factory-gate prices already down 33% year-on-year. Price reductions have started to drive up demand in the second half but at a slower-than-expected pace.

In its preliminary analysis, Solarbuzz sees global demand growing by less than 1% on the quarter and 20% on the year in the third quarter. Europe is projected to account for 58% of that demand, down from 78% a year earlier, while the US and China were the fastest-growing markets in the third quarter.

Some producers have started to scale down their output plans, while tier-one Chinese firms have kept their shipment outlooks. If producers meet their second-half guidance, global shipments are seen to top end-market demand by 4.4 GW, the report says.

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