Worldwide solar photovoltaic (PV) market installations reached a record high in 2011 — 27.4 gigawatts (GW), an increase of 40% year over year — according to the 2012 Marketbuzz report released Monday by NPD Solarbuzz.

This is a report filled with numbers, as this article will also be. So, if you just want the good summary of it all, it’s that it’s clear demand for solar photovoltaic systems was up in 2011 and looks ready rise even higher throughout much of the world in 2012. In particular, countries outside the 2011 top 10 are expected to start stealing market share soon.

The second half of 2011 saw a strong demand for photovoltaic systems ahead of a cut in incentives in several leading countries. This partially made up for the overproduction of solar panels in the first half of the year. 2011 was also a year in which demand in Asian markets for PV grew considerably and Chinese manufacturers made their mark on the global sector.

The Numbers

2011 saw the PV industry generate $93 billion in global revenues, up 12% year over year. Germany, Italy, China, the United States and France were the top five PV markets covered by Marketbuzz, making up 74% of global demand in 2011.

China soared from seventh place in 2010, with a year over year increase of 470%, to take third place. The European market accounted for 68% — or 18.7 GW — of world demand in 2011, down from 82% in 2010.

Germany, Italy, and France collectively accounted for 82% of European market demand. Solar cell production worldwide reached 29.5 GW in 2011, up from 23.0 GW in 2010.

Production from China and Taiwan accounted for 74% of global solar cell production, up from 63% in 2010. Markets grouped together as ‘the Rest of the World’ are expected to increase their global demand from 20% in 2011 to 32% in 2012.

European market share is projected to fall below 42% by 2016 as North America and other Asian markets continue to grow. China, itself, is expected to reach 17% of global demand by 2016.

Understanding the Numbers

“Aggressive cuts in incentives in Germany and other European countries have set up the potential for a global market decline in 2012, but ahead of these the rush to install is on, especially in Germany,” said Craig Stevens, President of NPD Solarbuzz.

“These cuts in tariffs will force companies to embrace self-sustaining marketing models earlier than they expected. Meanwhile, Chinese policy makers will face a decision whether to stimulate their domestic market even more than planned to support their globally dominant manufacturing base.”

Stevens added: “Cutbacks in polysilicon, wafer, and cell production plans before mid-year will be required to avoid further damaging margin declines. Meanwhile, it is significant that polysilicon manufacturing capacity — long the most constrained and profitable part of the PV chain — now has the highest capacity in the PV chain.”