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Dynamics of the global PV industry

November 16, 2009

It was a pleasure to finally meet up with Dr. Henning Wicht, Senior Director & Principal Analyst iSuppli, at the recently held Solarcon India 2009 event in Hyderabad, India.

He was also a speaker in the session: “Government policies shaping the growth of the industry.” Here are some of the highlights from his presentation.

According to Dr. Wicht, the global PV installation is likely to be around 8.3 GW in 2010. “However, it is too early to say whether this is good news. We will also see a 30 GW likely happening in 2013.” Italy, Spain, California (USA), France, Greece, Blugaria, Czech Republic, China and the USA are likely to witness aboive 60 percent CAGR during this period.

Touching on solar module production, he said that total PV modules is likely to grow from 14,52 GW in 2010 to 20,85 GW in 2013. During this period, production of crystalline modules will likely increase from 11 GW in 2010 to 13,97 GW in 2013, while production of thin film modules will likely increase from 3,53 GW to 6,87 GW in 2013.

The total crystalline cell production roadmap from is likely to expand from 11.679 GW in 2010 to 16.985 GW in 2013. The solar polysilicon production roadmap (2010-2013) is likely to expand from 22,79 GW in 2010 to 48,68 GW in 2013. According to Dr. Wicht, the dynamics of supply and demand determine the future price levels . Supply and demand for modules will likely balance in 2010. Also, polysilicon price will likely drop next year.

According to iSuppli‘s view at the end of Q3-2009 (source: PV Market tracker):
* German market picks up from July. In 2009 2,5 GW of PV system installations is possible in Germany (compared to 1,5 GW in 2008).
* Module oversupply peaked in middle of 2009.
* Installations in 2010 are estimated to grow by 60 percent reaching 8,343 GW.
* It will depend on Q4-2009 if supply and demand will be more outbalanced in 2010, or if the oversupply will continue next year.

It has now been indicated in Europe that “12 percent of EU 27 electricity shall be provided by PV”. About 462 TWh corresponds to 12 percent in 2020. Also, the insolation average: 1200 kWh/kWp installed. This would indicate 390 GW has to be installed in Europe by 2020. In 2008, only 10 GW are installed. The PV industry in Europe is likely to grow at a CAGR of 35 percent over the next 12 years.

Will the industry be able to install 100 GW in the year 2020 in Europe? According to the PV Systems Market Tracker, by 2013, annual installations of 17 GW in Europe looks likely, and 12 GW in the rest of the world.

Dr. Wicht compared three approaches for evaluating the PV market. He advised:
* 120 to 130 GW is forecasted by bottom up approach and by top down approach. assuming that PV will provide 1 to 2 percent of total energy consumption.
* 100 GW may seem very large compared with 4 to 5 GW in 2009 but is it feasible?
* PV is still in the early stage of adoption; large solar markets, eg., US, China and India have just started.
* By 2020, it is likely that PV would contribute 1 to 2 percent to the total energy consumption of the respective region.
* Markets can grow fast, when ground installation is possible (Spain).

Hence, the annual installations of 100 GW for Europe in 2020 looks realistic!

Dr. Wicht advised pursuing CO2 emission trading and grid management. A separate grid management is recommended from traditional energy suppliers. Also, there is a need to guarantee grid access for renewables (secure investment case).

Worldwide CO2 emission trading is the next way to grow PV. Recommendations include making energy by fossil resources more expensive to trigger demand in non-PV supporting regions. Also, there’s a need to generate budgets and funds for REE as well as stimulate self-consumption of REE energy.

Those interested in reading more on Solarcon 2009 can see my articles on the India Semiconductor Association’s web site.

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