According to a report from Navigant Consulting, 2004 through 2008 saw the photovoltaic experiencing demand increasing by a compound annual 51% for the four-year period, and industry growth at 79% in 2008 over 2007
The driving force behind the growth was Europe’s feed-in tariff (FiT) model. Demand in Spain, at 42% of the total market, was the major player in EU industry growth. Demand in Spain, at 42% of the total market, was the major player in EU industry growth. The 2004 to 2008 period also saw a silicon shortage that contributed to higher prices and sparked accelerated development in thin film solar panel technologies.
Large field grid connected applications in Europe created the largest global market for solar systems at 79%.
However, in September 2008, the government of Spain instituted a cap on its FiT program, seriously impacting solar panel sales. From 1973 through 2008, demand in the PV industry grew at a compound annual rate of 40%, but in 2009, a significant slowdown in sales of solar panels and systems in combination with an oversupply of equipment has put downward pressure on pricing for solar power system components; to the benefit of the consumer.
The good news for the industry says Navigant Consulting, is solar panel inventory levels may ease towards the end of 2009 and the market is see the beginning of recovery.
Grid connected solar power systems were and are the largest and fastest growing of all of the photovoltaic market segments, with an 80% share of global volume in 2004, an 82% share in 2005, an 86% share of total volume in 2006, and a 94% share of total volume in 2008. The fastest growing sub-segment of this application is the commercial application, primarily investor owned (>1-MWp) solar farms.
Grid connected systems have experienced extremely strong compound annual growth of 63% from 1998-2003 and 60% from 2003 to 2008. While industry demand may still be soft for the 2009 and possibly 2010 period, Navigant says the the compound annual growth rate for the forecast period is estimated at 18% to 33%.