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German solar installations undergo end-of-year resurgence

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11 October 2011

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The market research bureau IHS iSuppli sees a rising demand for PV systems in Germany at the end of this year. After slumping in July and August, Germany’s orders for new photovoltaic (PV) systems are set to soar in October and November, generating a surge in demand that may be difficult for major suppliers to accommodate.

The boom is driven by the drop in the country’s feed-in-tariff (FIT) in January of next year. Investors and homeowners are rushing to place orders for solar systems before this incentive decreases. The spike in demand had been expected since July. However, due to decreasing PV module prices, buyers were compelled to postpone their orders until cost conditions were more favourable.

The rapid rise in demand is presenting challenges for the leading solar suppliers, which are based in China. “Given the sluggish demand in the third quarter, the major Chinese suppliers reduced their factory utilization levels in the third quarter,” said Dr. Henning Wicht, Senior Director and principal analyst for IHS. “Because of this, some Chinese suppliers may not be able to ramp up production in time to capitalize on the demand surge in Germany. With delivery times of six weeks, these suppliers have a short window of opportunity to get their products shipped to Germany.”

Even with the fourth-quarter increase in orders, Germany’s solar installations are expected to decrease to 5.9 GW for the full year of 2011 compared to 7.4 GW in 2010.
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