Revenues in the photovoltaics (PV) industry reached a record high of $93 billion in 2011, a 13.4 percent gain over 2010 – and 150 percent over 2009 – according to a recent report by EPIC, the Paris-based European Photonics Industry Consortium.

EPIC Report on Photovoltaics: PV Market Overview 2012 cites three developments that affected the level of photovoltaic revenues in 2011. The first was an increase in the supply of polysilicon source material, which led to a nearly 50 percent drop in the cost of a key solar module component. The corresponding decreases in the prices of polycrystalline and crystalline silicon modules gave a big boost to sales volumes (60 percent) and a smaller boost (13 percent) to revenues.

The second development, high production of PV modules in 2010, led to expanded inventory. PV manufacturers rushed to liquidate this higher-cost inventory when the price of the new modules began to drop because of the lower cost of polysilicon in 2011.

The third was distortion in the PV market because of subsidy programs. Nearly 40 percent of the annual PV installations were registered in December 2011 in Italy and Germany, as consumers there dashed to beat the programmed semiannual decrease in the feed-in tariff, EPIC said, adding that feed-in tariffs continue to be a strong driving stimulus for global PV markets.

Globally, PV installations amounted to 27.4 GW in 2011, bringing cumulative PV electrical generation capacity to 68 GW at the end of 2011; installations grew by 56 percent in 2011 compared with 2010, the consortium said. Europe was the world leader in solar deployment in 2011: For the first time, more PV-generating power than any other energy source was installed there; it surpassed both natural gas and wind turbines, EPIC said. European countries represented a more than 63 percent share of the global installation total; Germany alone achieved a 27 percent share of the worldwide total.

The consortium noted that these percentages were down from the 2010 figures and that they indicate the growing importance of PV markets outside of Europe, particularly China. Europe’s installation of electrical generation capacity from all sources decreased in 2011, in part because of the economic recession that deepened there throughout the year.

In terms of PV production, Asian manufacturers are now the global leaders. China and Taiwan account for about 74 percent of the world’s supply, EPIC said. Production by European companies declined sharply in 2011 to less than 6 percent of the global total. Because many remaining European companies manufacture some of their products in Asia, the actual amount of manufacturing activity in Europe is even less significant, EPIC reported.

The consortium stated that, in 2011, 7.6 percent more wattage of PV cells was manufactured than generating capacity installed. At the end of 2011, less than one month’s worth of inventory remained. EPIC’s figure of merit (the ratio of total sector revenues to installed PV generation capacity) for 2011 improved significantly to $3.53 per watt compared with $4.60 per watt in 2010.

EPIC’s sources for the report included PV-Tech, NPD Solarbuzz, Germany’s Federal Network Agency, the International Energy Agency, company annual reports and private communications.