Navigant Consulting’s Bearish 2009 Photovoltaic Backcast

Paula Mints reiterates an anemic 4.6 GigaWatt Photovoltaic (PV) demand forecast for 2009.
A preponderance of news and financial reports confirm 2009 PV demand is flat to up from 2008.

From Intersolar North America

Last week per “Solar Market Declines for First Time Ever” by Ucilia Wang for Greentech Media:

Solar cell and panel makers are likely to sell about 4.6 gigawatts this year, compared with about 5.5 gigawatts in 2008, said Paula Mints, principal analyst at Navigant Consulting, at the Solar Energy Investment and Finance Summit in San Francisco.

The same day, iSuppli capitulated (please see my EU PVSEC: iSuppli 2009 Photovoltaic Forecast Wrong post) and raised their 2009 PV demand forecast to 5.2 GigaWatts (GW) with “Solar Panel Glut Peaks in Mid-2009”. I was LOL (Laughing Out Loud) when I first saw the upward revision reported in “iSuppli makes major revision to forecasted PV installations: PV module glut declining” by Mark Osborne at PV-tech.org.

Critiquing 2009 annual forecasts in the fourth quarter is unsporting, but I was driven by the media propagation and regurgitation of the faulty Navigant forecast as fact even before the 2009 books are closed [Ed. Note: I believe the above Navigant slide is representative or identical to the material presented].

As the Navigant Consulting, Inc. (NYSE:NCI) Principal Analyst, PV Services Program, Associate Director, Energy Practice:

Ms. Mints is widely recognized as an industry expert on photovoltaic (PV) technologies and markets. She provides clients with objective, comprehensive PV industry analysis based on extensive primary research, including her forward-looking understanding of market and technology trends. Ms. Mints’ strong grounding in primary research qualifies her to provide insight into the dynamic solar industry and its emerging trends.

I am both surprised and disappointed Ms. Mints appears so out of step with evolving 2009 PV market dynamics. I’ve seen Paula Mints in action as a presenter, panelist, and moderator since at least 2007, and I know she is very precise and detail oriented, almost to a fault. After all, Ms. Mints’ questions were instrumental in drawing out Rhone Resch for the SEIA trashes Gainesville Solar Feed-in Tariff post.

In the context of The Great Recession, 2009 has been extra challenging for PV analysts and forecasters. PHOTON Consulting had to revise their bullish 2009 forecast (please see PHOTON’s 7th Solar Silicon Conference) downward to 8.6 GW per “No way at mid-way” in the PHOTON International August 2009 issue (PI 8/2009, p.72-80). Though perhaps overestimated at the original 4 GW, PHOTON Consulting identified the monstrous German 2009 PV demand trend early.

Even better than idiosyncratic analyst forecasts, SMA Solar Technology AG (ETR:S92) just reported their best quarterly results ever and raised their 2009 guidance for the second time in “SMA generates record sales in the third quarter and increases the financial guidance for fiscal year 2009”. SMA estimates their 2009 PV inverter market share at 45 to 50%.

Per the SMA Quarterly Financial Report: January to September 2009 Forecast Report on page 21:

For 2009, the Company is expecting two-digit growth in the world market, measured by Gigawatt, in comparison to the previous year (5.7 GW). Against the backdrop of attractive framework conditions and the considerably lower prices for solar modules, Germany, North America, the Benelux countries, Australia, France and Italy are among the very interesting solar markets in 2009.

With a view to the outstanding growth potential in North America, SMA is erecting its first production site abroad in Denver, Colorado, USA. The Denver production facility will have an annual capacity of 1 GW and will be commissioned in the first six months of 2010.

From SMA Solar Technology AG Results for 3. Quarter 2009

A slide from the SMA Analyst / Investor Presentation Quarterly Financial Report January to September 2009 pegs the two-digit growth driving a greater than 6.5 GW 2009 PV market! SMA also expects further robust 2010 PV growth including North America.

With Ms. Mints in catharsis regarding the 2009 PV market, how much weight can be placed in her musings for 2010? Again per Greentech Media:

Mints cautioned against overly optimistic forecast, noting that political leaders in Germany haven’t said specifically how they might modify the incentive program. Solar companies have pinned their hopes on the United States as the next big market, but growth remains at a slow pace.

Global demand for cells/panels could be flat or grow by 10 percent in 2010, Mints said.

From SMA Solar Technology AG Results for 3. Quarter 2009

With a flat to up 2009 in The Great Recession aftermath, the PV market is shaping up for a resumption of high growth rates in 2010 though a revision of the German Renewable Energy Sources Act (EEG) before 2011 does loom as a risk. Even the iSuppli revised forecast projects 2010 PV installations (demand) of 8.34 GW. Of course, PV module revenue growth and Average Selling Prices are another matter.

Is “Doom and Gloom, an Overreaction” applicable to Paula Mints and Navigant Consulting?

6 comments

  1. Xiaohong Chen says:

    I was told that India government is going to roll out an incentive program, which will stimulate Indian domestic market. We shall see what effect that would have.

  2. Craig says:

    I agree with you. You have Sunpower, Yingli Solar, Trina Solar, JA Solar and of course Suntech Solar all revealing higher revenues in Q3 2009 than in Q4 last year and achieving these revenues on lower margins, which means greater volume. All these companies are forecasting strong growth in Q4 on advanced orders. Suntech solar just had its biggest quarter ever, USD$473Mn and expects a 10% increase or more in Q4.

    I think we are starting to feel the effect of the stimulus packages coupled with lower prices and increasing demand. I see a strong 2010.

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