Stamford, Conn. — The photovoltaic (PV) solar market is expected to grow at a compound annual growth rate (CAGR) of 26 percent through 2014, although the PV module market contracted on a revenue basis last year, according to a new report from Gartner Inc.
However, despite the growth, Gartner’s report, “Market Trends: 2010 PV Solar Market Growth Will Be Shadowed by Uncertainty” (G00174645), indicates that uncertainty and excess supply will dominate key areas of the PV market.
Despite strong growth over the past decade, partly due to government incentives in Europe, Japan and even the United States, the PV solar market has been marked with excess capacity and certain supply-chain segments with low margins, according to Gartner analyst Al Velosa.
Some of the key findings of Gartner’s report reveal that Germany, the United States and China will be the core PV demand markets through 2014. Also, leading PV vendors are increasing their competitive advantages thanks to their economies of scale and migration up the PV solar value chain into project development.
Yet, Velosa said that there are still significant challenges and risks in the market including the reduction of government support in the form of feed-in tariffs or tax incentives.
“Until the PV solar industry’s prices reach the point at which electricity generated from solar power is the same as or lower than average utility generation costs, the industry is susceptible to changes in government policy,” stated Velosa.
In addition, the report finds that electronics manufacturing services (EMS) companies are eying the solar market as a growth industry, which means the possibility of an increasing commoditization of the market as EMS companies start to lower margins.
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