Intersolar North America successfully concluded its seventh annual show in the heart of the United States’ largest solar market, California. More than 17,000 visitors from 74 countries visited 530 exhibitors.
The show had the latest innovations in the photovoltaic, energy storage, balance of systems, mounting and tracking systems, and solar heating and cooling market sectors.
It just shows how the USA has evolved as a leading market for solar PV over the years. One could feel USA creeping up on China! Which brings me to the other significant news.
Recently, there was news regarding the USA-China solar dispute. USA has won huge anti-dumping tariffs in the US-China solar panel trade case. A preliminary decision by the US Department of Commerce has imposed significant tariffs on Chinese solar modules in the anti-dumping portion of the case.
The decision has also closed SolarWorld’s “loophole,” which is said to have allowed Chinese module manufacturers to use Taiwanese cells in their modules, circumventing US trade duties.
Will this affect the Chinese PV module suppliers? Perhaps, not that much. Why so? China itself has a very huge domestic market for solar PV. They can continue to do well in China itself. It can also sell solar PV modules in India, as well, besides other regions in the Asia Pacific.
That brings me back to Intersolar North America 2014. Why was there such a low presence of Indian companies? The exhibitor list for the show reads only two — Lanco Solar Pvt Ltd and Vikram Solar Pvt Ltd. Where are the others?
If one looks at the Ministry for New and Renewable Energy (MNRE) website, there is a notification stating that a National Solar Mission (NSM) is being implemented to give a boost to solar power generation in the country. It has a long-term goal of adding 20,000 MWp of grid-connected solar power by 2022, to be achieved in three phases (first phase up to 2012-13, second phase from 2013 to 2017 and the third phase from 2017 to 2022).
Well, the MNRE has also put up a release stating complaints received about the non-function of the systems installed by channel partners. Without getting into details, why can’t Indian suppliers get to the ground and work up solidly? Some of the complaints are actually not even so serious. System not working. Channel partner not attending complaint! And, plant not working due to inverter (PPS) burnt down. These should be attended to quickly, unless, there is some monetary or other issue, which, at least, I am not aware of!
The CNA Corp.s Energy, Water, & Climate division released two studies earlier this week, which found that cost-effective options that power plants can use to cut water use can also help plants reduce CO2 emissions.
The first report, Capturing Synergies Between Water Conservation and Carbon Dioxide Emissions in the Power Sector, focuses on strategy recommendations based on analyses of water use and CO2 emissions in four case studies, which are detailed in the second report, A Clash of Competing Necessities: Water Adequacy and Electric Reliability in China, India, France, and Texas.
CNA’s Energy, Water, & Climate division released two studies, which found that cost-effective options that power plants can use to cut water use can also help plants reduce CO2 emissions.
“It’s a very important issue,” said lead study author Paul Faeth, director of Energy, Water, & Climate at CNA. “Water used to cool power plants is the largest source of water withdrawals in the United States and France, and a large source in China and India.”
“The recommendations in these reports can serve as a starting point for leaders in these countries, and for leaders around the world, to take the steps needed to ensure the reliability of current generating plants and begin planning for how to meet future demands for electric power.”
India needs to learn from the Intersolar North America show. It also needs to look carefully at CNA’s reports. It is always great and good work that attracts global attention. India has all of the requred capabilities to do so!
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.
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.”
There are three phases of PV industry development, including formation, regional development and globalization, according to Bettina Weiss, VP, Global PV Business Unit, SEMI, USA. She was delivering the opening keynote at the ongoing Solarcon India 2012 event in Bangalore, India. The event runs till September 5.
According to her, in the first stage, discoveries lead to inventions. Inventions find niche and high-value applications. Technology, and not manufacturing is the key driver here. For regional development, new industries seen as source for economic development. Markets develop through government subsidies. Global supply chains and regional clusters of excellence develop as well.
State of global PV industry
The government policy support for PV has been strong till 2011. However, it may fall of during 2012-16. The supply-demand balance was generally stable till 2011, which could likely see structural overcapacity in 2012-16. The demand, which has been over 70 per cent till 2011, will likely see -20 per cent growth from 2012-16.
While there were many ‘saviour’ markets, such as Spain (2008), Italy (2010) and Germany (2009-11), Europe may prove to be not enough to absorb excess capacity in 2012-16. Poly, scale and the learning curve had been competitive till 2011, and are likely to give way to non-poly costs, technology and efficiency during 2015-16. While the gross margin was consistently above 20 per cent till now, the path to profitability remains unclear for the period 2012-16.
As for the cell and module makers performance, sharp price declines since 2011 have stimulated record installations globally. The effect on PV manufacturers have been severe. The entire supply chain has been plagued with collapsing margins.
Revenue to shipment ratio declined for five consecutive quarter since Q1 ’11. The list of insolvencies keeps growing. The outlook for 2012 is that volume/shipment upside is likely, but the path to profitability is still unclear.
Then, there is the ongoing solar trade war!
The US Department of Commerce (DOC) levied anti-dumping tariffs against Chinese solar module imports, with tariffs ranging from 31 per cent to 250 per cent. In response to the US tariffs, China’s Ministry of Commerce, on July 21, 2012, announced that it will start its own AD and CVD investigation on imported solar-grade polysilicon from US, and is initiating an AD investigation on these imports from South Korea. The EU Commission will decide by mid-September whether to accept a similar complaint and launch an investigation.
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!
Here is an outlook on the global solar PV industry for 2012, done with the assistance of Dr. Henning Wicht, senior director and principal analyst, IHS iSuppli. First, the outlook for the global solar PV industry for 2012. According to Dr. Wicht, the bottom up analysis results for the global solar PV industry is at 22 GW. However there is upside potential, e.g., in Italy and China, of a total of 6 GW.
On the same vein, what is the outlook for solar cell production in 2012? He said that based on the 22 GW market, 19.6 GW of cSi cells will be produced in 2012. If the market is growing faster (upside potential), then 24 GW is possible.
Let us now have a look at the current top 15 producers. The graphs here are for global crystalline module producers and global thin film module producers, as of Q2 2011. The data for 2012 will certainly look different.
Fig. 1 is about the crystalline module producers, as of Q2-11, with Suntech the leader at 9.8 percent share. Yingli with 6.8 percent and LDK with 6.4 percent are the next two. The others are: Trina Solar 6.2 percent, Canadian Solar 5.2 percent, Sharp 4.6 percent, Jinko 3.7 percent, Hanwha Solar 3.6 percent, Jabil Circuit 3.5 percent, SolarWorld 3.3 percent, REC 3.2 percent, Sunpower and Kyocera with 2.8 percent each, Sanyo Electric 2.5 percent, Bosch Solar 2.4 percent and all of the others at 33.3 percent.
Fig. 2 is about the global thin film module producers, as of Q2 2011, with First Solar as
the leader at 45.5 percent share. Solar Frontier with 10.5 percent and Sharp with 5.6 percent are the next two. The others are pretty small at the moment, with some of the major ones being Q-Cells with 3 percent, Bosch Solar 1.7 percent, etc. Others constitute 15.5 percent.
Improve cost structure, diversify downstream!
Two years ago, iSuppli had advised: ” improve the cost structure, improve the sales side, and diversify downstream.” How true does these hold for 2012?
Dr. Wicht said: “This advice remains very valid. Since 2009, nearly all Western players have developed downstream activities. They are using the power plant business to outbalance week demand and to enter into emerging markets.
“The challenge is now at the Chinese players: How do you maintain the high utilization of factories when sales is not visibility and there is no downstream business? PV installations in China are used as a “fast exit”, generating module sales and maintaining utilization (e.g., Yingli).” Read more…
Solar PV industry recommended to stay optimistic; US govt. supports India’s clean energy initiative!
Solarcon India 2011 started today in Hyderabad, with Jim Brown, president, Utility Systems Business Group, First Solar Inc., stating that the global solar PV industry is in a bit of the state of turmoil. Some are driven by pure supply-demand. He recommended the industry to be strategically optimistic. He cautioned that not everyone who’s playing in this field, will go on to survive the next two to three years. First Solar reiterated its optimism regarding its own prospects in the industry.
Commending Solarcon as a flagship event for the Indian solar PV industry, Dr. Bharat Bhargava, director – Photovoltaics, Ministry of New & Renewable Energy, Government of India, said that the policies and programs started by the Indian government are now yielding results. The Jawaharlal Nehru-National Solar Mission has seen the participation of the industry, the academia and the funding agencies, showing that the success of the program lies in the hands of the people involved.
When the Indian solar PV industry started, the country was said to have only 2MW. By the end of October this year, India had 125 MW. By 2013, it will likely reach 2GW, according to Dr. Bhargava.
He apprised the audience regarding the REC (renewable energy certificate) program. Initially, the REC was for three years, but was later extended to five years. As of now, experts are consulting to enable it to increase to seven years. He estimated that the Indian solar PV industry might even go up to 100GW, instead of 20GW, and encouraged everyone to work together and make this happen.
Francisco J. Sanchez, Under Secretary of Commerce for International Trade, USA, stated that a lot of excitement is in the air! “We are
committed to India and its solar industry. There are opportunities to do big things in this industry.” He added that solar has achieved a triple bottom line.
According to Sanchez, the solar industry is worth $17 billion in India and it is growing. India is spending $19 billion by 2022 to produce 20GW of solar energy. There will be a lot of engineers, manufacturers, etc., who can monitor and contribute to the growth of the industry. He advised that India will need to add 150GW of capacity over the next five years. Therefore, India is well placed to seize opportunities with trade partnerships.
He said: “The US government fully supports India’s clean energy initiative. There is an abundance of opportunities in solar. We can achieve much more in partnerships. We are committed to working with you. It is a huge opportunity for both countries.
“Some of the obstacles include repositioning for success, where companies indulge in unfair trade practices. When the market is open for competition, it creates thousands of jobs, and the market is growing quickly, helping many. It is all about chance and choice. We have a chance to build a great industry. We need to work together in partnership and share value. We will work together for the good of India and its consumers. We hope that India will take the same approach. India now has the chance to build an exciting industry for the future.”