According to Finlay Coville, VP and team leader, NPD Solarbuzz, full year end market PV demand during 2012 reached 29.05 GW. The demand is forecast to increase to 31 GW in 2013. China is expected to replace Germany as the leading market for the first time. The global market is likely to have a CAGR exceeding 15 percent, highlighting long term confidence in global PV adoption levels.
Supply vs. demand overview in 2012
The upstream c-Si module/thin-film panel suppliers produced 30.1 GW of new product in 2012. Combined with inventory levels through the value chain, this provided 31 GW of panels to the downstream channels. 29 GW was used for market demand, while 2 GW went to the downstream inventory.
Demand overview 2013
Year 2013 is shaping up as a 31 GW demand year under the most likely scenario. Over 50 percent of the end market demand is projected to come from China, Germany and North America (USA and Canada). 2013 will be a transition year for the emerging PV territories. Both the Middle East and Africa and Emerging Asia will likely reach 1 GW.
PV demand in 2012 accounted for approximately 30 percent of all PV installed globally. The industry growth in 2012 is positive, but set against a backdrop of an industry that had been accustomed to year-on-year growth often exceeding 100 percent. The industry is forecast to return to double digit growth.
PV scenario forecasting continies to show divergent outcomes in 2017. A high market demand scenario assumes a strong economic environment and aggressive PV policies by way of direct incentives and lower regulatory hurdles.
Five-year cumulative demand by geography
Cumulatively, global PV demand is forecast to exceed 230 GW over the five year period to 2017. China is forecast to install 51 GW accounting for over 20 percent. Europe will continue to offer strong regional PV market. North America and Japan will provide over 61 GW of demand. Emerging markets are projected to create over 25 GW of PV demand, more than 10 percent of the cumulative total to 2017.
By application segment, the ground-mount segment will remain the single largest segment over the five years. Residential and non-residential (commercial) segments will continue to be characterized by specific end-user requirements, different supply channels and routes-to-market for upstream suppliers.
The PV industry was configured to supply over 45 GW in 2012. The industry is likely to be in an over-capacity mode in 2013, with balanced supply/demand levels restored from 2015. Market share aspirations remain a key driver for PV manufacturers. During 2013 and 2014, the capacity taken offline is likely to be more than compensated for by newly ramped capacity.
With multi-domain c-Si module production, most panels had efficiencies in the 13-16 percent band during 2012. High efficiency concepts are not likely to strongly influence the module efficiency landscape during 2013 or 2014. If high efficiency cell types gain traction, the share of modules with efficiencies above 16 percent will increase.
In 2012, a wide range of efficiencies were produced, but with levels that do not compete with c-Si modules for space-constrained applications. The range of panels available in the 12-14 percent band is likely to grow strongly from 2015 as leading suppliers benefit from process improvements. Panels below 10 percent efficiency will become obsolete.
Despite end market growth expected, revenues available to each part of the value-chain will see strong declines Y/Y in 2013. This is due to the ASPs declining at a faster rate than the end-market demand growth, within a strong overcapacity environment. Revenues are also unlikely to recover for each value-chain segment until the 2016-2017 period.
What’s with prices?
2012 was the fourth year in a row that c-Si module prices declined and was the largest Y/Y decline. As capacity throughout the PV chain has increased, the oversupply has put further pressure on the ASPs. Declines in pricing occurred further upstream, at the poly, wafer and cell segments.
Tracking SAM revenues fron selling modules into downstream channels is becoming less important to the PV industry. as a number of module suppliers take on EPC and project developer roles.
PV equipment spending
As for PV equipment spending, the most likely forecast sees capacity being added by a select gtoup of tier 1 c-Si makers during 2014. The next cyclic downturn is forecast for 2016-2017. This assumes excess capacity is added in the next upturn.
If we look at the current scope of trade disputes, there are five major markets — EU, USA, India, Canada, China — investigating products being imported, with China featuring in most cases. Most disputes are being pursued by the internal bodies, but several have been referred to the WTO for review. A growing number of emerging PV regions already have domestic content incentives.
PV demand was 29 GW in 2012, and 2013 is forecast to tip 31 GW. 230 GW of new PV demand is forecast between 2013-2017, adding to the 100 GW at the end of 2012. Eighty percent of PV demand in 2013-2017 will come from the top 10 end markets.
Finlay Colville, vice president, NPD Solarbuzz, USA, recently presented the 10 key trends for the PV industry. According to him, the 10 key trends are:
1. PV demand growth. The industry has been characterized by strong growth rates of 25 percent to >100 percent Y/Y for the past decade. Now, the industry needs to plan for growth at more modest levels.
2. Globalization of PV demand. The emerging regions emerged for PV demand in 2012.
3. China end-market demand in 2013. China is forecast to account for approximately 25 percent global demand in 2013. The emerging demand is confined to a select group of countries across the three emerging regions.
4. Capacity imbalance reset. The nameplate capacity levels at the 60-GW level are often cited. However, the the PV industry currently has an ‘effective’ capacity of 41-42 GW. Therefore, demand needs to exceed 40 GW for proper reset.
5. Competitive shakeout. The top-10 module suppliers by MW for 2012 only comprised 50 percent of the year shipments. Also, a similar pattern is seen for c-Si cell production. We can expect another two years of shakeout on the supply side.
6. Cost and price rationalization. Every segment of the supply side is subject to price/cost pressure: from poly to BoS supply. Even reducing the silicon/nonsilicon costs of modules to 53c/W level by the end of 2013 may still result in negative gross margins.
7. Supply and demand rationalization. The poly suppliers have been operating at reduced utilization since 2H’12.
8. Evolution of PV technology roadmaps. Strong marketshare gains from standard c-Si multi ingot/wafers. The end-markets are driving module efficiencies and power ratings. The alternative growth methods have not gained traction and are being phased out.
9. Capital expenditure cyclic patterns. The PV process equipment suppliers have been impacted severely by overcapacity and overinvestments of 2010 and 2011. There is a strong chance that 2014 will end up as low as 2013. Also, technology-buy cycles don’t exist as yet in the PV industry.
10. Domestic protectionism counter measures. The effects of trade wars may yet have a profound effect on the PV industry into 2014. There will be direct effect of global overinvestment into domestic manufacturing. The other countries have an impact, but China and Europe decisions are key.
In summary, the PV industry is a 30-GW end-market today, and is forecast to grow to the 40-GW level in 2015. Europe demand is declining, but greater number of countries/territories expected to provide new PV demand. Demand in China during 2013 is essential for local suppliers.
The PV industry is capable of producing 12-15 GW per quarter. Supply and demand need a 40-GW+ market to balance. The shakeout phase is proceeding slowly, and will continue for the next two years. Reducing costs are not yet keeping up with price declines. ASP and ISP stabilization period is needed badly.
The end-market demand has become dependent on low ISPs. Also, multi c-Si based modules are dominating the industry. PV equipment suppliers are unlikely to see meaningful new order intake until 2014 or beyond. Finally, trade wars and domestic protectionism measures are crucially dependent on the EU and China decisions in 2013.
Ms. Fatima Toor, analyst, Lux Research, recently presented on opportunities in turbulent PV equipment market, in association with SEMI, USA.
Global PV market trends
Bankruptcies are galore. Eg. Solyndra, Abound Solar, Konarka, etc. Global trade wars are also on the rise. There are US tariffs on Chinese solar cells. There is also an EU investigation on Chinese solar panels. Then, there are Chinese investigations on US, EU and Korean polysilicon dumping. Government incentives have been lowered in the EU, but raised in Asia and Americas. Following Barack Obama’s re-election in the US, the environmentalists are again upbeat about green energy.
Global PV demand increase will be driven by Asia and Americas in the coming years. Emerging markets will grow over six times in size from 2011-2017. Crystalline Si will be the dominant installed PV technology, at least till 2017. Gap between demand and supply will close.
The Q3-12 geographical capacity distribution would be across PV value chain. China leads in polysilicon, cells and modules supply. Chinese equipment manufacturers market share has been on the rise, ramping up competition for Western equipment suppliers.
Lux Research sampled 493 PV manufacturers. Of these, 40 percent are based in the EU, 28 percent are based in China, 17 percent are in the US and 15 percent are in the Rest of the World.
Opportunities for equipment manufacturers in current market state
Cost, efficiency and price are fundamental drivers of PV industry. Innovations across the value chain will enable higher margins for PV industry. The desire for cell and module manufacturers to reduce costs and differentiate will drive opportunities for equipment manufacturers.
Crystalline Si technology: Innovations across crystalline Si value chain would enable opportunities for equipment suppliers. Fluidized bed reactor (FBR) process requires 10 lWh/kg and is a continuous process. Why is FBR only 6 percent of total polysilicon capacity today? The reasons are:
* No off-the-shelf FBR reactors are available.
* Process complexity requires that Si granules can be polluted by impurities.
* There is an opportunity for equipment manufacturers to develop off-the-shelf FBR equipment that will enable reduced production costs for polysilicon.
* GCL announced developing its FBR technology.
* Samsung Fine Chemicals and MEMC have partnered to set up FBR polysilicon production due to its lower production costs.
Monocrystalline silicon (c-Si) ingot growth using Czochralski (CZ) method is high cost and results in pseudo-square c-Si wafers. Plate seed for qc-Si ingot growth with mc-Si grains on the edges and c-Si in the middle. ReneSola has technology with wafer capacity of 2GW of which 1.6GW is qc-Si Virtus wafers and 0.4GW are c-Si wafers. ReneSola is likely to be one of the Chinese companies to survive the shakeout due to its strategy and technology.
Opportunities exist to optimize qc-Si ingot growth. Modified directional solidification (DS) furnace makers claim 90 percent c-Si and 10 percent mc-Si yields during qc-Si ingot growth. In reality, 60 percent c-Si and 40 percent mc-Si results in high wafer binning and sorting costs. This provides an opp for equipment manufacturers to improve the c-Si yield to higher than 90 percent. The Qc-Si capacity is likely to increase in the coming years as DS furnace manufacturers innovate.
The outlook for the global solar PV industry does not look encouraging, at least, if recent happenings are set as benchmark. How will the global solar PV industry perform in 2013? How will the modules segment perform? How will solar cells segment perform in 2013?
Dr. Henning Wicht, director and principal analyst Photovoltaics, IHS iSuppli, said: “The industry will remain under pressure. We expect prices to decline further on all nodes. Margins will remain thin. Cell production outside of China, in particular Taiwan, can benefit from US anti-dumping tariffs on Chinese modules.
“However, Taiwanese cell producers will face difficulties, since European customer base will shrink. Module production will remain challenging. Prices are expected to decline further due to overcapacities and fierce competition.” Here is a graph of the module price decline.
There are a few other questions. Did the global solar PV industry touch 22 GW in 2012? What is the prediction for 2013? Also, how is Japan doing? Are we seeing pro REE politics there?
Dr. Wicht said that IHS iSuppli expects 31 GW of new installations in 2012. For 2013 IHS iSuppli forecasts 35 GW. “Installations in Europe
are declining, while installations in emerging markets and Asia are increasing. China, US and many of the new markets favor ground installations. Europe and Japan address more rooftops. Japan has been seeing a lot of activities in H2-2012. We expect this boom to continue into 2013.
“IHS expects that the Japanese government will adjust tariffs in 2013, since investment conditions are very generous. This is helpful to kick-start the market. However, the generous tariffs will become expensive for rate payers if maintained too long. Details on tariff adjustment are not yet defined.”
Finally, how will the industry focus on electricity storage and grid integration in 2013? And, what’s going to happen with Chinese suppliers in 2013?
Dr. Wicht replied: “Solar companies will see continuing and even increasing difficulties during 2013. Thin margins for all producers (including silicon) will maintain. Smaller players will stop production. Also 2nd and 3rd tier Chinese suppliers will partially stop production. Tier 1 Chinese players will face difficulties of financing if stock prices will not increase and companies will be excluded of Nasdaq (pending).
“Also, anti-dumping investigations in Europe can harm Chinese module business in 2013 since buyers will be careful to avoid any retroactive tariff from beginning of 2013. Strategy wise, 2013 will be a very difficult year. Electricity storage is an emerging topic, which is now addressed mainly by inverter suppliers. Grid integration of PV power is becoming a concern of EPCs and investors.”
Recently, The Brattle Group came out with its report titled “The Employment Impacts of Proposed Tariffs on Chinese Manufactured Photovoltaic Cells and Modules”. Here are excerpts from the report.
At the request of the Coalition for Affordable Solar Energy (CASE), The Brattle Group has studied the employment impacts of a proposed trade restriction on Chinese-manufactured crystalline photovoltaic cells and modules.
This topic is timely, because the US Department of Commerce (DOC) is currently reviewing a petition that would lead to substantial tariffs on Chinese-produced photovoltaic cells and modules. Petitioners have requested tariffs up to 250 percent on Chinese-manufactured products in response to alleged government subsidies and below cost pricing.
In brief, we estimate that tariffs will slow the growth in domestic demand for photovoltaic systems by homeowners, commercial establishments and utilities, resulting in substantial job losses. We estimate jobs at risk under two tariff levels – 50 percent or 100 percent.
We find that a 50 percent tariff will shut the vast majority of Chinese imports out of the US market, and a 100 percent tariff will effectively block them altogether. We also estimate employment impacts accounting for two scenarios, a low scenario which assumes low demand elasticity and high supply elasticity, and a high scenario which reflects a high demand elasticity and a low supply elasticity. Read more…
As per reports on the Internet, the Government of India has said that it has no objections to companies importing low-priced Chinese solar cells, so long as the cells imported meet the prescribed quality standards!
Oh, well! This is yet another blow to the battling group of the domestic manufacturers. A week before, their plea for seeking imposition of import duty on finished solar equipment was rejected! Is this yet another admission of defeat, this time by the Indian government, at the hands of the hard-working Chinese solar PV manufacturers? Looks like it!
Now, I am not sure what has actually transpired! However, this was very much along the cards and expected! At least, I have seen all of this happen in the Indian telecom and later, electronics industries. Therefore, why should the solar PV industry be any different? Besides, it is a clear indication of the rising might of the Chinese, globally!
Get it clear: as of now, there is no country or manufacturer, that can take the gigantic risks that the Chinese industry is so used to taking, and succeeding, in the long run! Unless the other manufacturers of the world are able to take necessary risks and continue to produce products on par or better than those from China, this story will be repeated, again and again!
Whether the Jawaharlal Nehru-National Solar Mission succeeds in the long run — that remains a major question! However, the fact that remains as of now is: there is no country as strong as China, as far as solar PV is concerned, especially in manufacturing!
The Indian government’s stance is directly opposite to the USA, which has reportedly taken China to the World Trade Organisation over dumping of solar cells and panels.
In fact, today, the Coalition for American Solar Manufacturing (CASM), supported by more than 150 US employers of more than 11,000 workers, applauded an analysis by Hari Chandra Polavarapu, MD of solar and clean-technology research for brokerage firm Auriga USA, that underscores the importance of holding China accountable to international trade law.
Polavarapu’s target is China’s alleged campaign of underwriting development of massive solar manufacturing capacity – without cultivating a significant domestic market – then wielding exports of artificially low-priced product as a “battering ram” to knock down the US solar manufacturing industry.
Polavarapu contends in a series of research and analysis notes that China’s alleged actions against foreign domestic industries not only distort markets but also sap the power of competition to drive efficiency and innovation. Polavarapu characterizes China as a “state sponsor of predatory capitalism and asymmetric warfare” that “does not help in weeding out inefficient players but poisons the profit pool for everyone.”
What a contrast!
Now, I am not the judge, sitting with any decision! We, as a nation decide what is best for us!
In telecom, there are so many overseas makers, when there was room to cultivate local ones, back in the late 1990s. However, that never happened! In components, we tried our best to ‘kill’ the few local manufacturers by reducing import duty to zero. In electronics, we never did try to develop any local industry with earnest. Perhaps, the logic was: the presence of strong global players!
Here’s the best of electronics, solar/PV and telecom for the year 2011. Enjoy! ;)
M/H can truly deliver ‘real TV’ experience!
Presenting the excerpts from the welcome address by Debasish Paul Choudhury, president, SEMI India, at the ongoing Solarcon India 2011, being held in Hyderabad.
This year’s show features a larger exhibition, a three-day dual track conference, and will feature three concurrent technical programs. The theme for this year’s exposition, representing the widening solar value chain in India, is “Showcasing the Solar Eco‐System: From Polysilicon to Power Plants.”
The exhibition with over 115 exhibitors from eight countries, compared to 81 exhibitors in SOLARCON India 2010, covers the entire solar value chain, will provide you an opportunity to see a wide range of new products and services offered by Indian and international companies, under one roof.
This year’s show, as many of you are aware, is certified by the US Department of Commerce (US DOC), and features an exclusive US Pavilion with 14 leading US companies participating in the exhibition. I am also delighted to welcome a 35-member Clean Tech Delegation led by the USA’s Under Secretary of Commerce for International Trade, Francisco J. Sanchez to the show.
I am delighted to have in our midst two other distinguished guests – Dr. Bharat Bhargava, director – Photovoltaics, Ministry of New & Renewable Energy, Government of India, who is widely credited to be the architect of the India’s National Solar Mission. In the same vein, I am happy to welcome Jim Brown, president, Utility Systems Business Group, First Solar Inc., the world’s largest thin film module manufacturer, with us this morning.
Featuring more than 70 speakers drawn from the industry, academia and government, the conference is themed “Charting India’s Roadmap to Solar Leadership — Translating Potential into Reality.” The conference attracts high-profile participation of solar energy leaders from all segments of the industry supply chain, academia and governments from India and around the world.
The three-day conference also includes an LED Lighting summit, co-organized with Frost & Sullivan, which will focus on SSL (solid state lighting) technology with speakers from among LED manufacturers, LED suppliers, researchers and others.
The climate in which we are holding the show this year has not been without its challenges – on two fronts: the events in Hyderabad on the one hand (which have now, we are grateful to all parties involved, returned to complete normalcy) and the considerable stress that the solar industry is under due the slowdown in the European economies, regulatory changes in the major solar markets and manufacturing over capacity resulting in a fall in PV system prices over the last two to three quarters.
This show and the support it has received are proof that the long term prospects for the solar industry remain most bright in India.
Dr. Henning Wicht, senior director and principal analyst, PV, IHS iSuppli Corp., presented a paper at PV Taiwan 2011. Let’s take a look at how long is the boom in solar installations likely to last!
According to Dr. Wicht, the solar market is forecasted to reach 21.9 GW in 2011. In 2011, global installations will record again and reach 21.9 GW. Germany and Italy will remain the leading markets. The USA and China are growing strongly. Worldwide PV installation forecast, updated May 20, 2011 is currently at around 25 percent. It will then likely dip to -10 percent in 2012, before finally moving up to 32-33 percent in 2015. The upside potential of 6.5 GW in 2012 may result in 27 GW of installations.
Installations in 2012 are forecasted at 20.5 GW (-11 percent). However, historically the photovoltaic market never declined. Even in 2009, the most challenging year, the market grew by 33 percent. Can it repeat again?
In that case, what’s the situation in the world right now?
He replied: “In China, the support of domestic supplier industry will be the driver, while there will be expansion of solar subsidy programs. The forecast for 2012 is 2.4GW and the upside potential for 2012 is 1 GW. Germany will see pro REE politics. There will be re-opening of the ground installation market segment; and lifting of installation target to 5 GW, the upper edge of the target corridor. The 2012 forecast is 5 GW and the upside potential for 2012 is 1 GW. Italy will also see pro REE politics. There will likely be a target corridor of 2-3 GW. The 2012 forecast is 2.5 GW and the upside potential is 2 GW.”
Also, Japan will see pro REE politics. There will be an expansion of solar subsidy programs. The 2012 forecast is 1.6 GW and the upside potential is 1 GW. The rest of the world (RoW) will see an enhanced support of REE at the expense of nuclear energy. There will also be implementation of incentives and funding for solar. The 2012 forecast is 9 GW and the upside potential is 1.5 GW. In total, the realistic upside potential (50 percent) is estimated at 24 GW for 2012, and the total upside potential is estimated at 27 GW.
“Now, if we re-look at the global PV installation forecast, it is likely to be 21.9 GW in 2011, 24.17 GW in 2012, 28.23 GW in 2013, 32.3 GW in 2014 and 43.05 GW in 2015. In 2011, the installations in Europe will reach 63 percent, but will decrease to 33 percent in 2015.”
Let’s have a look at the emerging solar/PV market situation at the moment. According to Wicht, the solar emerging markets in 2014 include: Americas at 1,300 MW, Europe/Middle East at 2,150 MW, Africa at 950 MW, Asia 3,440 MW and Australia 775 MW.
So, where are prices going for modules, cells, wafers and poly? He said: “First, module prices will not stop falling. At the end of Q3 2011, modules are offered at 0.8€/W (factory gate). The residential systems are priced at 2.0€/W in Germany.”
The year end 2011 forecast, as of July 2011 shows the silicon (spot) price at $50-55/kg, wafer at $0.54/Wp (multi), cell at $0.80/Wp (for tier 2 players) and module at EUR 0.85/Wp (multi, top 10 players). The year end 2011 forecast, as of Sept. 2011 will show silicon (spot) price at $48-55/kg, wafer at $0.43~0.48/Wp (multi), cell at $0.72/Wp (for tier 2 players) and module: at EUR 0.80/Wp (top 10 players). Currently, the most profitable segments of the value chain lies at the tail ends in polysilicon and in the balance of system/inverter. Read more…
I had the pleasure of interacting with Dr. Charlie Gay, president, Applied Solar, Applied Materials Inc., recently. He began by saying that solar power was becoming increasingly affordable.
Dr. Gay said: “Most people don’t realize that solar is already cost effective in a number of locations and applications, and as those uses of solar expand, the scale of the industry grows. As scale increases, cost declines in a highly predictable way for manufactured technologies like PV.
“In 2011, PV electricity is already cost-competitive with traditional sources of residential power in 19 countries, including Italy, Spain and the Caribbean. By 2020, this number can grow to more than 100 countries, representing 98 percent of world population; 99.7 percent of world GDP; 99.2 percent of energy related CO2 emissions; and 99.5 percent of global residential electricity consumption. Areas with plenty of sunshine, such as India, already have costs that are a fraction of what they are elsewhere in the world.
“A common rule in the solar power industry is that for each cumulative doubling of installed photovoltaic (PV) solar power (the type of panel commonly seen on the roofs of homes and businesses) the price of solar modules decreases by 18 percent.”
We have now reached a critical inflection point in the cost reduction of solar. Applied continues to drive down cost is to make the manufacturing of solar panels more efficient. The reduced cost is being driven by:
• A decreased cost for silicon, a key ingredient in solar panels.
• Increased capacity in solar panel manufacturing.
• Technology innovation, i.e., ability to cut thinner wafers at higher yields w/less silicon loss.
Dr. Gay added that the cost of manufacturing solar panels is already reported by some to have fallen below $1 per watt and is capable of continued decreases due to reductions in the cost of silicon, innovative crystal growth techniques, high precision printing technologies operating at 3,000 wafers per hour and many more advances based on increased yield and scientific insights. In 2010, for example, approximately 63 gigawatts of cumulative solar PV had been installed worldwide, with 18 installed last year alone.
“Solar power is already an ideal solution for electric power during peak use times in many locations and will continue to get more cost competitive as the manufacturing learning curve continues –namely, that for each cumulative doubling of installed photovoltaic solar power the price of solar modules decreases by 18 percent.” Read more…