PV module gross profits will top $5 billion in 2015, which is more than double the profits garnered in 2014 – Strong Solar Demand
IHS Inc. (NYSE: IHS), the leading global source of critical information and insight, has identified at least 89 countries with solar photovoltaic (PV) end-markets that will show growth in solar installations in 2015, which is forecast to drive a 30 percent increase in demand. IHS forecasts that this demand growth will raise PV module gross profits to $5 billion in 2015, which is more than double the profits garnered in 2014 and a four-year record.
“This year we expect a good combination of high demand in a vast number of countries, no collapsing end-markets and stabilizing prices,” said Ash Sharma, senior research director for solar at IHS. “This positive market environment will cause marked improvement for the supply chain.”
|
PV Modules |
|||
|
2014 |
2015 |
Y/Y Change | |
|
Shipments |
48 GW |
61 GW |
+27% |
|
Revenues |
$31 billion |
$38 billion |
+20% |
|
Gross Margins |
7% |
13% |
+6% |
|
Gross Profit |
$2.3 billion |
$5 billion |
+117% |
The surge in PV demand, coupled with a slowing in average selling price (ASP) declines and improving cost structures, will result in greater profits throughout the supply chain, according to the PV Integrated Market Tracker. In particular, gross margins for the wafer industry will increase to 20 percent this year, while module industry margins will increase to 13 percent.
Last year there were 73 countries that enjoyed year-over-year growth, but the 21 countries that declined accounted for a 5.6 gigawatt (GW) drop in demand. Demand will decline in only seven countries (0.5 GW) this year.
“This year’s improved PV market is not necessarily a return to the good times of 2009 to 2011, but it is certainly an industry turning point,” Sharma said. “In 2015 we can expect a much healthier year for the supply chain, after two very difficult years, when incentives were pared back in several countries, over-supply continued and prices collapsed. We now see far healthier and sustainable margins for much of the industry.”
