SAN FRANCISCO, USA: With the photovoltaic (PV) industry set to implement cutbacks in their production plans during the second half of 2011 - as a result of a slowdown in demand across Europe - accurate industry-wide capacity and production data will be increasingly important to making appropriate adjustments.
Equipment spending on manufacturing capacity expansions during 2010 grew by 83 percent Y/Y and in 2011 is on track to grow a further 41 percent. Meanwhile, leading c-Si cell manufacturers in China are guiding 2011 shipment levels to more than 50 percent compared to 2010 – growth rates well above most demand scenarios currently being forecast for the year. Up until now, the main rationale for these aggressive plans has been driven by corporate goals based upon relative market-share growth.
Adding to the 2011 business challenges, industry-wide inconsistencies in corporate definitions of manufacturing capacity and in-house cell production create significant challenges for solar companies to align supply with an accurate determination of the global supply/demand balance.
With over 350 c-Si cell and thin-film panel manufacturers around the world, Solarbuzz allocates cell (and thin-film panel) manufacturers into tier categories, depending on a range of criteria; vertical integration upstream, technology maturity, ramped manufacturing level, ASP’s achieved, brand-awareness, and sales and marketing network. Three tier levels are then used for categorization. For example, tier 1 manufacturers match the full list of criteria listed above. Conversely, tier 3 manufacturers match few – if any – of these.
In 2010, approximately 50 cell manufacturers fell into the tier 1 grouping, manufacturing 77 percent of the cells produced during the year. Some 220 manufacturers then made up the tier 2 grouping, contributing 22 percent during 2010. The final tier 3 group – which includes many of the new thin-film entrants working on pilot lines or in the process of qualifying new production lines – account for the remainder.
Turning to capacity, tier 1 manufacturers must be prioritized if a clear picture of supply is to be understood during 2011. Further, nameplate capacities should also be replaced by annualized ramped manufacturing capacities. During 2010, tier 1 producers had an annualized ramped manufacturing capacity level of 18GW. In 2011, this is projected to grow to around 30GW with much of the capacity additions due to come online during 2H’11, significantly above market needs.
Looking back to last year, ranking of in-house 2010 production by company is partly dependent on the precise definition of in-house. This updated ranking in the recently released Marketbuzz 2011 report from Solarbuzz is based on further discussions with major manufacturers which provided additional information. For the purposes of this ranking, the definition of in-house production can include production at affiliated companies and also where a manufacturer has contractual rights to production located at external facilities.
Additional adjustments of internal capacity capabilities were necessary to enable a more accurate assessment of ramped manufacturing capacity levels for several of the leading companies; in particular, where debottlenecking and line enhancements had resulted in ramped capacity levels more than 150 percent of original nameplate capacities reported.
Fig. 1: Top Solar Cell Producer Rankings in 2010Source: Solarbuzz, USA.
“With many manufacturers contracting out larger proportions of their production in order to access lower cost and preserve supply flexibility, adjustments also have to be made to take out double-counting of cells,” said Finlay Colville, senior analyst at Solarbuzz. “Clear definitions and application of terms have become increasingly important to establish consistency between stated capacities, production and utilization. This clarity will also become increasingly important to corporate decision-making as manufacturers re-adjust short-term expansion plans to align with the 2011 global supply/demand balance.”