Devaluation of Euro to affect 3Q12 solar installations in Europe Nuying Huang
Taiwan-based solar cells have been sold using US dollar quotes.However,the recent debt crisis in Europe,which has been causing the devaluation of the euro,is likely to affect the solar market in Italy,according to industry sources.
The devaluation of the euro means a decrease of purchasing power of customers in Europe.This impact is stronger in Italy than Germany,added industry sources.Due to conservative attitudes of banks towards lending,installations in the second quarter are likely to be lower than expected.In addition,the true impact of the debt crisis and devaluation are likely to show in the third quarter.
The devaluation of the euro means customers in Europe are in a weaker position to buy imported items.This is likely to happen to Europe-based solar module firms that purchase solar cells from Taiwan.
Industry sources pointed out that the debt crisis has not been affecting the solar market to a great extent in the second quarter because customers have been rushing to complete installations before the end of June,the completion date for projects looking to enjoy incentive rates before Germany's additional cuts made on April 1 come into effect.
In addition,the new incentive cuts announced by Germany have been sent to the Bundesrat(Federal Council)for review.Currently,the market is still waiting for a final result to be announced.
Italy has been hit hard by the debt crisis in Europe.Industry sources noted that the previous forecast of Italy's second-quarter 2012 installations were 2GW,but now it seems installations are likely to fall between 1-2GW.
The fall of installations in Italy in the second quarter is likely the result of tightened controls over loans.Some banks in Italy have interest rates around 7-8%,higher than the average interest rate of 3-4%of banks in Germany.
The market believes the new incentive cuts in Italy,which are scheduled to come into effect on July 1,are likely to be pushed back.
