According to research firm IHS iSuppli’s recent report, the global solar industry will continue to show growth in 2013; however, the falling prices coupled with relatively smaller volume growth is going to hit the revenues of the solar firms. Total installations in 2012 stood at 32GW, which is expected to rise by 9.38% to 35 GW in 2013. Solar installations have sustained growth for more than six years in a row and this trend is likely to continue “until at least 2017” says Ash Sharma, a senior analyst from IHS.

However, in the short term, the rate of growth is going to slow down. The revenues of the market will decline to about $75 billion in 2013, which is $2 billion less from 2012 and $19 billion less from its peak level of $94 billion in 2011. The leading players in the industry such as First Solar, Inc. (NASDAQ:FSLR), SunPower Corporation (NASDAQ:SPWR) and Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE), will continue to focus on driving down their manufacturing costs. The industry will witness consolidation across the upstream supply chain with the number of firms falling to 150 in 2013.

Meanwhile, the geographic dynamics of the industry are changing with Asia looking to replace Europe as the biggest market. Until 2010, the solar industry was primarily focused on Europe, which accounted for 80% of the global demand. By 2012, the demand of PV from this debt-ridden continent shrank to 53% and will fall further to 39% in 2013. Germany, which accounted for most of the solar sales and was the number one solar market in the world, will be pushed back to the third spot in 2013 with its place being taken over by China, home of five of the 10 biggest global solar companies. The U.S., Japan and Italy will secure the second, fourth and fifth positions, respectively. As mentioned in a previous article, despite the current FiT cuts in Japan, the country will continue to attract investments in its solar sector and will remain one of the leading markets.

On the other hand, the total demand for solar PV and systems from the top five markets mentioned above is expected to fall by 10 percentage points to 65% in 2013. That gap is being filled by the new “mid-sized markets” such as South Africa, Romania and Saudi Arabia. This is an even bigger development that signifies that with the fall in average selling prices and rising energy needs of the emerging economies, the solar industry is becoming more global. IHS believes that this will bring more stability in the industry and will change the trend of falling revenue levels in the long term. The sales are expected to touch “double-digit” growth levels from 2014 till 2016. Total revenues will increase by 53.33% from the current levels to $115 billion in 2016, which would reflect a significant turnaround.