Looking forward to a better 2012
Looking back at 2011, I was exceedingly wrong about the price solar panels would sell for, and suffered massive investment loses (as anyone that owned solar stocks in 2011 is sure to have done). My only slender consolation is that I was nearly right (I guessed 25GW) about the volume of solar panels installed...after the prices dropped.
The latest reports are that ~27GW were installed worldwide in 2011. After a slow start the year finished strong, with Germany installing 7.5 GW and Italy reportedly installing 9GW! [In Feb 2011, I projected Germany installing 10GW and Italy installing 6GW, so while I got the market volumes reversed, I was much closer than many pundits and this is in spite of (?) all the angst over lowered FITs and the very uncertain debt markets in Europe last year.] Still the solar bears were correct that too much capacity existed in 2011, and that prices had to plunge to clear the market--and the bears have the profits to prove it.
With solar panels now selling for around $1/W, it will be interesting to see if new markets start taking share from the established European markets in 2012. I'll guess that Europe installs 25GW of solar in 2012. Unless Italy changes its FIT again, I expect they will install another 10GW, while Germany might also do 10GW. With volume and efficiency Germany already installs solar for 2.25Euro/W (~$3/W) and should drive that down by 10% over the course of the year. By midyear (I expect) Germany will be installing PV for less than the retail price of solar (aka grid parity). It may already be at grid parity (depending on your assumptions), but I expect that by midyear it will be widely accepted that solar power costs Germans less than retail. Logically that should improve the dynamics driving solar adoption.
In good solar conditions, SolarBuzz is putting the (~LCOE) price for an industrial solar install at 15.3cents/kwh in the US, which sounds pretty reasonable (especially since it is before incentives...). I expect US installs to double to 3GW in 2012 and for the average installed price to drop to around $3.50/W. ($3/W utility and $4.50 retail)
China jumped past the US last year (it installed over 2GW, some report 2.5GW) by offering a $0.15/kwh FIT midyear. China could install 4GW in 2012. Japan will likely institute a FIT slightly above China's, and could install around 2GW. India could install over 1GW.
Worldwide I will guess that panel prices drift down to $0.85/W and average installed cost is near $3/W and that global installs approach 40GW (50% growth y/y).