Expect Volatile Quarters

Implications: The new Spanish Feed In Tariff (FIT) - if passed by the government will have significant impacts on the global PV Industry. As the Spanish market will be significantly smaller than in previous years all the modules that are produced and were designated for the Spanish market will need to find new markets. Developing new markets will be the key challenge for PV module producers around the globe.   

Analysis: Many comapnies had plans to continue to sell big volumes to large scale projects in Spain. Given the proposed new regulation in Spain this will no longer be possible. As the market in 2009 will be 70 - 80% (i.e. 700 - 800 MW) smaller than in 2008 many companies need to find new markets.
But where?
And how will this effect margins?
Potential markets are 

- Germany
this already is the biggest global market. Demand in 2008 already is very high as FITs in Germany will decrease by 8 - 10% in January 1, 2009. 
Demand in Q1 has traditionally been slow so Germany will not be able to pick up additional capacities in Q1

- Italy
An attractive market but getting projects approved and constructed takes time. Italy will grow but not as fast as some manufacturers hope. 

- Greece
Has an attractive FIT but a market cap and a slow approval process

- France, Belgium, Portugal
All are increasing - maybe even growing by several 100%, but absolute numbers are still small

- Czech Republic, Bulgaria
These are new markets, projects are planned but they will take time to work out the details

- Japan
Will be taken care of by the japanese module manufactureres, there will be almost no outside sales into Japan

- South Korea
Growing on the demand side, but exploding on the supply side. With many new players supplying modules far in excess of the domestic market

- USA 
Growing and having very strong potential. But not in early 2009

- India, China, etc. 
Lots of potential and developing but just not yet meaningful markets

On the other side
Big production capacity expansions of established players. Big investments into new capacities by new players and new technologies. 

So we can expect major volatility and a potential shake out during the next 4 - 6 quarters. Not every company will survive a time of potential overcapacity and significant price decreases. 

New companies will have their chances if they are well funded and provide a competitive edge and USP. 
Established players will need to bring down their cost basis and will need to rely on their existing customer network and abiliy to create new markets fast.