Christoph Hammerschmidt EE Times Europe (06/24/2009 11:51 AM EST)

MUNICH, Germany — The U.S. and China will soon pass Europe as the leading photovoltaics region. The factors determining these market dynamics will be price pressure and, in the case of the USA, political support for renewable energies, market researcher Frost & Sullivan finds.

China will drive down the price for polysilicon and solar modules — with the effect that it will be able to strengthen its leading position as solar module supplier for global markets, a Frost & Sullivan study finds.

"When it comes to solar cells and modules, the Asian vendors are expanding aggressively," said Frost & Sullivan Green Energy Research Manager Alina Bakhareva. "Low costs and increasingly technical expertise will help China to gain and increase its foothold in the global solar market. In particular European and Japanese competitors will suffer."

Competition pressure will grow also from the side of the US which increasingly discover renewable energies as a future market. "The USA hitherto have used only a fraction of its huge potential," Bakhareva stated. "They have all it takes to develop a strong and well diversified solar market."

Europe clearly will lose market share, despite its advantages, the researcher said. When the competition heats up, the region can build on three important factors: A solid research landscape, competitive production and public incentives. These incentives however are decreasing, and the economy crisis with difficult access to capital will put smaller market participants such as retailers more under pressure than large projects. This will lead to what Frost & Sullivan calls a healthy slimming process. Nevertheless, the long-term trend towards renewable will remain unbroken, in particular towards solar energy.

In terms of local markets within Europe, Germany is seen to continue to have a strong position. Many large manufacturers currently are in the process of expanding their capacity or build new solar plants.

France, in contrast to Germany, tends to focus only on building-integrated PV applications since their operators are receiving the highest benefits due to the regulation situation. "While France achieved good growth rates over the past five years, we have the impression that the market would have developed better if politics would have treated all types of installations equally", criticizes the Frost & Sullivan researcher.

While Spain also has become a major player in the solar game, public incentives have been reduced; Bakhareva estimates that the amount of new installations in 2009 will decline in comparison to 2008.

Italy and Greece are "sleeping giants", the market sesearcher finds. The reason is that these countries have a high potential and attractive feed-in-tariffs. Administrative hurdles however keep the sleeping giants from unfolding their potential.

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