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.”
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…
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…
Part III in the series ‘Round-up 2009’ features the top posts in solar photovoltaics during the year gone by. Some friends and readers have spent hours searching for blog posts. Hope this list will help them to easily find the blog post they are looking for. Here you go!
Dramatic price forecast to reshape PV industry: iSuppli
Opportunities in India’s solar/PV landscape: SEMI India
More mature PV industry likely post solar downturn: iSuppli
How is PV industry reacting to oversupply conditions?
Dr. Robert Castellano on how to make solar a ‘hot’ sector again – 1
Dr. Robert Castellano on how to make solar a ‘hot’ sector again – 2
Consolidation likely in solar cell manufacturing to control oversupply, and, lessons for India!
Top-10 solar cell suppliers in 2009: iSuppli — This was also a top read article during 2009!
Solar PV industry scenario in India!
Rising opportunities in India’s solar PV space
Highest efficiency Si solar cells realised with n-Si — Prof. Weber, Fraunhofer ISE
Solar Semiconductor’s Hari Surapaneni on why solar is good for India!
India major destination for solar/PV investments!
Dynamics of the global PV industry
Prof. Eicke R. Weber, Fraunhofer Institute on future of PV
Solar PV and Utility 2.0: Making the grid smarter!
Union Cabinet approves National Solar Mission; 20 GW by 2022 (not 2020)! — The day and event everyone’s waited so very patiently for long in the Indian solar/PV industry!
Indian government unveils National Solar Mission Plan document!
What’s next in PV equipment?
Again, it is extremely difficult for me to list the Top 10. If you can decide, that’ll be great.
Best wishes to my dear friends, well-wishers and everyone for a happy and prosperous 2010!
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.
Recently, iSuppli came out with a study on whether the current solar downturn will lead to a more mature photovoltaic industry! According to iSuppli, severe downturn in the global PV market in 2009 could actually have a more positive outcome for the global solar industry, yielding a more mature and orderly supply chain when growth returns.
Worldwide installations of PV systems will decline to 3.5 Gigawatts (GW) in 2009, down 32 percent from 5.2GW in 2008. With the average price per solar watt declining by 12 percent in 2009, global revenue generated by PV system installations will plunge by 40.2 percent to $18.2 billion, down from $30.5 billion in 2008.
“For years, the PV industry enjoyed vigorous double-digit annual growth in the 40 percent range, spurring a wild-west mentality among market participants,” said Dr. Henning Wicht, senior director and principal analyst for iSuppli.
“An ever-rising flood of market participants attempted to capitalize on this growth, all hoping to claim a 10 percent share of market revenue by throwing more production capacity into the market. This overproduction situation, along with a decline in demand, will lead to the sharp, unprecedented fall in PV industry revenue in 2009,” he added.
What about new entrants?
I quizzed Dr. Wicht how this downturn would lead to a more mature PV industry and what about the new entrants?
Dr. Wicht said: “We expect that the solar industry will invest more softly. The years 2007/2008 were special. Each of the hundreds of suppliers were ready to invest to reach 10 percent market share. This is not likely to repeat.” Interesting! “Also, the new entrants will invest more modestly and closely linked to fixed customer orders,” he added.
Role of FIs in solar
Are financial institutions paying that much importance to solar, especially in places such as India? This is an issue that was also raised and discussed at the recently held SEMI India solar/PV paper launch.
According to Dr. Wicht, the financial investors are definitely looking into solar, mainly in Europe and US. “PV in India is still at the very beginning. From my experience, there is not yet much attention of financial investors for PV in India,” he noted.
Off-grid or grid connected apps?
Turning the discussion to off-grid vs. grid connected applications, I sought Dr. Wicht’s advice on the route that should be followed. Again, this topic was discussed during the SEMI India meet early this month. Hence, the interest for India in this field is significant!
Dr. Wicht highlighted: “Installations for the off-grid remains a small portion in terms of the sold modules (MW), about 5 percent. The off-grid system selling might be a good way to start in places such as India. For cell and module production, on-grid is where the volumes are needed.” Hope the Indian solar photovoltaics industry takes note of this valuable advice — and it holds good for other regions as well.
I also asked him regarding a good low carbon growth strategy for developing countries. Dr. Wicht said that depending on the place, it could be a combination of wind, solar and biomass.
Compensating for Spanish whiplash!
According to iSuppli’s study, the single event most responsible for the PV market slowdown in 2009 was a sharp decline in expected PV installations in Spain. Also, beyond Spain, the PV market is being adversely impacted by the credit crunch.
Therefore, why won’t attractive investment conditions in other some countries compensate for the Spanish whiplash?
Dr. Wicht said: “The investigated countries start from a low level of installations and show long, administrative procedures, limits of feed-in tarifs and reduced capital access. They simply cannot compensate the 2.6GW of Spain in 2008.”
Finally, what is likely to happen after the shakeout or fall in the coming years? He added: “System demand will grow stronger from H2-2010, absorbing the inventory, which has been built up in 2009 and 2010. From 2011, demand for modules will rise. It might pick up quickly. Then, companies, which are able to supply on short notice/(flexibility) can gain market share.”
Let me see if I can convince Dr. Wicht to visit India and share his insights with the Indian solar/PV industry. Last, but not the least, thanks Jon!