The rally in solar shares is expected to fizzle out, HSBC Holdings Plc said, forecasting “flat” photovoltaic panel installations for 2012.

Global solar panel installations will total 25.5 gigawatts of capacity in 2012, down from last year’s 26 gigawatts, the London-based bank said in an e-mailed note. It predicted 25 gigawatts of installations in 2013 and 27.275 gigawatts in 2014.

“We continue to suggest investors stay cautious given our expectations of flat global installation growth and flat pricing outlook in 2012,” HSBC analysts led by Joseph Jacobelli said in the note, dated yesterday. “The sharp surge in January was a result of volume surprises in a number of countries, namely Germany, China, the U.K., Belgium, France and Greece.”

The Bloomberg Industries Global Leaders Solar Index has risen 30 percent this year after Germany in 2011 installed a record 7.5 gigawatts of panels and as Suntech Power Holdings Co. Chief Executive Officer Zhengrong Shi and Trina Solar CEO Jifan Gao said the Chinese market may double this year.

By contrast, the analysts estimate 3 gigawatts of installations in China this year, up from 2.14 gigawatts in 2011.

“We believe China wants to cap new additions for now and developers want to see more tariff subsidies,” HSBC said. Even so, the bank raised its 2013 forecast for Chinese installations by 1.5 gigawatts to 5 gigawatts.

HSBC also raised its forecast for the Indian market by 200 megawatts to 800 megawatts this year and by 450 megawatts to 1.2 gigawatts in 2013. It cut its U.S. forecast for 2013 by 1.5 gigawatts to 3.5 gigawatts, citing concerns about financing for utility-scale projects and low gas prices.