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Solar PV module profits will top $5bn in 2015

Firmer prices and rising demand will push earnings to four year high, IHS says.

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Photovoltaic module profits will more than double year-on-year to $5bn in 2015 thanks to a combination of firmer prices and rising global demand, according to a new report.

Analysts at IHS have identified at least 89 countries with solar photovoltaic (PV) end-markets that will show growth in installations this year, which is forecast to drive a 30% increase in demand.

“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.”

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% this year, while module industry margins will increase to 13%.
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, the report says.

“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.”

The PV Integrated Market Tracker focuses on the markets for polysilicon, solar wafers, PV cells and modules, and PV installations, delivering expert analysis, market data and market forecasts.

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