For the first time in a decade, global solar photovoltaic (PV) demand grew by less than 10%. Installations totaled 29,000 megawatts of solar PV in 2012, up just 5% from 27,700 megawatts in 2011. The industry had been hoping for a minimum total of 30,000 megawatts.

Europe remained the largest regional market, taking nearly 16,500 megawatts or 60% of global demand. However the percentage shrank, from 68% in 2011 and 82% in 2010.

Asian nations installed 8,690 megawatts, led by a spurt in Chinese demand in the second half of the year. North America accounted for 3,490 megawatts, with much of the demand coming from California, where renewable portfolio standards and rebates smoothed the path.

The data comes from NPD Group’s Solarbuzz unit, and the company’s senior analyst noted the acute problem for the solar PV makers like First Solar Inc. (NASDAQ: FSLR), SunPower Corp. (NASDAQ: SPWR), and others:

For supply and demand to have been balanced during 2012, end-market demand should have approached the 45 GW level. This is 50% higher than actual PV demand in 2012, and reflects the lack of demand elasticity that characterizes the PV industry today. It also explains why even those companies that gained market-share in 2012 still ended up reporting significant operating losses.

Solarbuzz did not offer a forecast for solar PV installation in 2013, but did say that emerging nations (read “China”) will be “pivotal” to the solar industry’s supply and demand balance.

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