Recent elections in Europe ushered in uncertainty for the solar market, and the new subsidy policies to take effect in 2H12 also rendered players conservative. According to EnergyTrend, the solar research division of TrendForce, orders for solar modules will continue to pour in till mid-May, while orders for solar cells will persist till early June. When asked about the orders in 2H’June, related manufacturers stated that given the cutthroat competition, companies still walk on thin ice, not to mention that any market noise could cost them orders from clients. Unless the murky outlook turns clear, conservatism will keep on dominating the downstream solar industry.
Moreover, related manufacturers pointed out that the orders in 2Q12 are most likely to pour in well into early June, while orders in 3Q12 and 4Q12 will start emerging at InterSolar Europe 2012, which will commence on June 13-15, 2012. However, spurred by the subsidy changes, German and Italian solar markets have seen strong demand surges in 1H12. Related companies indicated that Germany’s installed solar capacity in 1H12 is expected to amount to 3GW. Nonetheless, due to the fact that the booming growth in 1H12 is attributed to the large subsidy cuts set to become effective in 2H12, countries which have seen steep upswings in installed solar capacities in 1H12 are likely to undergo setbacks in 2H12. On the other hand, rumor has it that solar prices will dip soon. Yet, according to TrendForce’s survey, the current spot prices are already below the manufacturing costs. Aside from a number of manufacturers offering low prices for certain clients, the current spot prices will most likely stay flat.
In terms of utilization rate, according to TrendForce, currently most major solar makers are at full capacity. Chinese first-tier solar module makers Trina Solar, JA Solar, and Suntech Power are all packed to capacity, while Taiwanese top solar cell makers’ utilization rates are well above 80%, which indicates the solar companies are striving to catch up with the 2Q12 orders. However, certain manufacturers are still concerned about the outlook after June. Manufacturers stated that most orders in 1H12 have been placed, but major makers’ utilization rates still remain high. Given the post-June uncertainty and a high likelihood of high utilization rates persisting, spot prices may plunge even further.
