Changes in European Regulation will create volatile Quarters

Implications: The recent changes in the German Feed In Tariffs (expected) and the steep proposed cuts by the Spanish Government (rather unexpected) will create volatile market conditions around the globe. At the same time as significant additional production capacities are added along all steps of the PV supply chain the second biggest market (Spain) will drop its demand significantly - if the proposed regulation is enacted.

Analysis: The 800 - 1000 MW that have been sold and installed in Spain this year need to find new markets around the globe. But will Germany, Italy, France, Greece, South Korea and the US be big enuogh in the short term to pick up the products. Given the current regulatory environments this is unlikely. Expect price cuts and margin squeezes along the whole supply chain for the next 3 - 4 quarters.So the question is - who will survive the short term volatility and emerge as a major player in the medium term strong growth PV market.