Due to a surge of demand in December, Germany's 2011 total solar installations reached 7.5GW, exceeding installations in 2010 and expectations. Industry sources believe inventories have been cleared out and an upsurge of shipments can be expected in first-quarter 2012.

Germany's revised 2011 installations caused many research institutes to change their 2011 global installation estimates from 17GW to 23GW.

According to the government in Germany, installations in December 2011 alone reached 3GW, a record high. The surge of demand was due to upcoming incentive cuts, said industry sources. Despite the surprising scale of installations, Germany only accounted for 30% of the 2011 global market, down from 50% in 2010.

Industry sources believe there are a few factors for the sudden surge of solar demand at the end of 2011. First, the solar industry was facing low utilization rates in fourth-quarter 2011, hence the rise of installations was due to inventory clear outs in distribution channels. Secondly, significant price drops have decreased the cost for solar PV systems, which increased the internal rate of return (IRR), which finally stimulated demand effectively.

The market believes current inventory levels are low, which will induce a wave of increased shipments in first-quarter 2012.

Source:digitimes