iSuppli Says Solar PV Growth to Continue Through 2011 (FSLR, ESLR, STP, More...)

According to a report from iSuppli, the solar photovoltaic market is set to continue its expansion in 2011. Installations could go from 14.2 Gigawatts to 20.2-GW in 2011, a 42.7% increase. The growth would be lower than the 97.9% seen in 2009, but is still very impressive as government subsidies are beginning to dissolve.

One iSuppli analyst writes that the slowdown will come as Feed-in-Tariffs from Italy and Germany receive cuts, and Euro budget concerns in Greece, Italy, and Spain linger. He notes that the weakening of the euro versus the Chinese yuan will artificially inflate prices of solar cells in Europe.

iSuppli notes that, if the euro stays above $1.20/€, then "crystalline silicon solar cell prices will not increase in 2010 and instead will decline by 5 percent compared to 2010." Additionally, installation prices in 2011 may fall 10% or more.

Due to the decline in installation costs, return on investment may become more attractive. Italy and Germany, amid their FIT cuts, will still see a ROI of 8-10%, on average.

Germany is expected to install 9.5-GW in 2011, up 43.9% over 2010; Italy is aiming for 2.0-GW, up 53.6% from 2010 and the U.S. is looking at 1.9-GW, up 79.3% from 2010.

Installations in 2012, however, are expected to rise a modest 2.8% to 20.8-GW. According to one analyst, “iSuppli believes 2012 will be the year when the PV industry weans itself from the generosity of German subsidies. The German market will cool off and expand by only 4 to 5GW per year for the next several years. We believe the government aims to keep an orderly progression in order to achieve an ultimate goal of around 80GW of installed PV capacity.”

Around the solar sector today:

• First Solar, Inc. (Nasdaq: FSLR) up 0.3%;
  
  
• Evergreen Solar Inc. (Nasdaq: ESLR) up 2.3%;
  
  
• Suntech Power Holdings (NYSE: STP) up 2.8%;
  
  
• SunPower Corporation (Nasdaq: SPWRA) up 1.9%; and
  
  
• JA Solar Holdings (Nasdaq: JASO) up 1.5%.

The Claymore/MAC Global Solar Index ETF (NYSE: TAN) is up 2.6% to $7.82 today.

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