US, Chinese, and Taiwanese solar-cell makers gain ground

USA: Japan's suppliers of solar photovoltaic cells and panels, which dominated the industry for many years, slipped in the supplier rankings in 2008, according to a new 2009 report from IC Insights, Solar Energy: Growth Opportunities for the Semiconductor Industry.

The 2008 top 10 solar ranking contains two suppliers based in Japan, three in China, two in Taiwan, two in Germany, and one in the US (Fig. 1).Source: IC Insights

Sharp Corp. was the No. 1 PV device supplier in 2006 and for several years before that. In 2007, Germany's Q-Cells AG and China's Suntech Power Holdings Co. Ltd. overtook Sharp, according to IC Insights' figures.

In 2008, First Solar Inc., a US-based supplier of thin-film PV panels made with cadmium telluride, blew past both Sharp and Suntech, pushing Sharp down to No. 4 in the 2008 rankings, which are based on the peak-megawatt value of the PV devices produced and sold by each supplier.

The totals include PV cells, and in the thin-film case, PV panels. Cell-based panels are not included to avoid counting cells twice. First Solar's MW TF panel sales increased a stunning 144 percent in 2008, boosting it to the No. 2 position.

For its part, Sharp has stated extremely ambitious plans for expansion of its capacity to manufacture and sell silicon-based TF panels over the near term. If successful, Sharp could quickly make up for lost ground.

Sharp was not the only Japanese supplier whose position declined in the 2008 ranking. Kyocera Corp. slipped from the No. 5 spot in 2007 to No. 6 in 2008. Sanyo, which was No. 7 in the 2007 ranking, did not make IC Insights' top 10 ranking in 2008. Mitsubishi also dropped in the ranking.

Future PV device rankings are expected to show significant changes due to the small increments that separate many of the top players. The top four suppliers all achieved market shares (based on MW sales) between 8 percent and 9.5 percent.

A second tier of suppliers was formed by those ranked No. 5 through No. 10, all having between 4 percent and 5 percent market share, and with several additional suppliers close on their heels.

Changing rank within these tiers is statistically inevitable, and it is entirely possible for a supplier to move quickly from the second tier to the first, as First Solar demonstrated in 2008.

Other than First Solar, the risers in the top 10 list were exclusively suppliers based in China or Taiwan. Although China's Suntech slipped from No. 2 to No. 3 on MW growth below that of the total global industry, JA Solar Holdings Co. Ltd. rose from No. 10 to No. 7 in the ranking based on 109 percent growth in MW sales in 2008.

Yingli Green Energy Holding Co. Ltd. advanced from ninth place to eighth on the strength of 93 percent growth.

In Taiwan, Motech Industries Inc. swapped seats with Kyocera, moving from No. 6 to No. 5 thanks to a 67 percent increase in MW sales. But perhaps more impressive was the performance of Gintech Energy Corp., which equaled First Solar's growth of 144 percent in MW sales in 2008, pulling itself up from No. 12 to No. 8 in the ranking.

Gintech, like JA Solar, makes solar cells only; these two companies follow the business model of top-ranked Q-Cells, which has only recently started to diversify beyond pure-play PV cell manufacturing.

Other suppliers in the top 10 are involved in panel manufacturing, system installations, and other aspects of the solar value chain.

At the bottom of the list is No. 10 Solar World AG, a German company that holds the distinction of being the biggest manufacturer of PV cells in the US, thanks to the recent expansion of its plant in Hillsboro, Oregon.

A US-headquartered cell manufacturer, SunPower Corp., almost made it into the top 10 in 2008, but SunPower manufactures its cells in plants in the Philippines.

Solar PV capex cuts will ease capacity growth in time for recovery

USA: Much like the boom-to-bust IC industry in recent decades, manufacturers of solar-energy cells and thin films are having a difficult time matching investments for new production capacity with the recessionary and recovery throes of the fledgling photovoltaic (PV)-device market, based on the analysis in a new 2009 report from IC Insights: Solar Energy: Growth Opportunities for the Semiconductor Industry.

The mismatch of photovoltaic capacity expansions and slumping market demand is underscored by the expected 32 percent increase in global PV production capacity in 2009 despite a forecasted 22 percent decline in solar system installations this year, according to the new report.Source: IC Insights

Although PV-device manufacturers made known their intentions in late 2008 to trim capital spending, many of the top suppliers have been unable to abruptly halt those expenditures in 2009. Consequently, global PV solar-device production capacity is expected to rise 32 percent in 2009 to a total output capable of generating 11.5 gigawatts of electricity.

This follows a 69 percent increase in installed photovoltaic cell and thin-film (TF) plant capacity in 2008 to 8.7GW, says IC Insights' new report. Cuts in capital spending will slow capacity expansion to just 15 percent in 2010, but that will come when the solar market begins to recover with a 37 percent growth in system installations next year, based on the repor's 2009-2013 forecast.

In 2010, IC Insights believes that capex spending levels for PV cell and TF module capacity will fall further than the 23 percent decline forecast for 2009 as producers confront rising inventory stockpiles and plummeting capacity utilization.

The report shows global solar PV cell and TF capital expenditures falling 40 percent in 2010 to about $680 million from $1.13 billion in 2009, excluding capex on assembly of cell-based modules and panels. However, solar PV capital expenditures will begin a steady recovery in 2011, rising 13 percent that year to $772 million but surging 74 percent in 2012 to $1.34 billion, based on IC Insights' five-year forecast (see Fig. 1).

With PV manufacturers unable to abruptly curb additions to production plants, capacity utilization rates for solar devices are forecast to plummet from 83 percent in 2008 to 54 percent in 2009 and to 52 percent in 2010.

However, IC Insights is forecasting a steady rise in plant capacity utilization to 63 percent in 2011 and to 82 percent in 2013. The efforts to achieve high levels of capacity utilization will stretch out to the end of the forecast period and will be an important contributor to the industry's reduction of the cost per watt of solar systems.

The new 2009 solar report estimates that plants in mainland China and Taiwan accounted for 39 percent of total global PV device production in 2008, with European production at 28 percent of the worldwide total and Japan 16 percent. US producers captured only 10 percent of the total in 2008, based on IC Insights' data.

Solar PV forecast -- industry will bounce back with adjusted priorities

SCOTTSDALE, USA: IC Insights recently released a new report, its first to examine and analyze the solar photovoltaic industry from the perspective of semiconductor industry participants.

Solar Energy: Growth Opportunities for the Semiconductor Industry starts with the market for high-purity silicon shared with the chip industry, a market where the rapidly changing balance between supply and demand is contributing to a rethinking of priorities in the solar PV sector.

For some time, PV device makers have concentrated on reducing the amount of silicon required per watt of energy output, in part because silicon represented a large portion of the cost of a solar cell, but also because the supply of solar-grade silicon was limited. With new polysilicon plants coming on line, the supply constraint has evaporated and the cost of silicon is coming down significantly.

At the same time, demand for solar installations has plummeted due to the recession and credit crunch, as well as government incentive cutbacks in Europe. Solar panel inventories have built up, and competition has intensified for the reduced available business, driving prices down across the solar PV supply chain.

IC Insights forecasts that on a megawatt basis, global installations will drop 22 percent this year. Average selling prices for solar panels is expected to drop 28 percent.

IC Insights expects demand for solar installations to come charging back in 2010 as new government incentives in the US, Europe, and China gain traction. Installations are forecast to rise 37 percent to 6.7 gigawatts, with continued growth achieving a CAGR of 25 percent over the 2008-2013 forecast period.

The price drop of 2009, while not forecast to repeat in 2010-2013, will make solar systems more attractive in more markets even as government incentives supporting installations start to taper off starting four or five years down the road, IC Insights believes.

With the cost of silicon dropping, R&D investments in solar device design and manufacturing technology will back off the years-long push to minimize silicon consumption and center on new ways to reduce costs and boost device efficiency. For example, several solar cell makers are coming out with new back-contact cell designs, as described in the report.

Solar Energy: Growth Opportunities for the Semiconductor Industry provides a detailed forecast of the solar cell and panel market, including thin-film panels, as well as a system-level forecast and a country-by-country demand forecast.

The forecast includes a unique look at the semiconductor content of solar systems, a small but very fast-growing segment, and predicts global capital spending for solar cell manufacturers over five years. The report also reviews the numerous technology approaches challenging mainstream silicon wafer PV cells.

Solar Energy: Growth Opportunities for the Semiconductor Industry comes with a full-color three-ring binder for easy off-the shelf reference and an electronic copy on CD-ROM that includes image files of the charts and tables. The report is available for purchase at $2,975 for individual users and $5,880 for multi-user corporate situations.

Solar industry strategies rerouted by market conditions

SCOTTSDALE, USA: Thin-film (TF) solar panels, most notably the cadmium telluride panels made by First Solar Inc., have solidly established themselves as offering a lower price-per-installed watt than traditional solar panels made using silicon wafers.

The 876 megawatts of TF modules sold in 2008 is expected to grow to 5.2 gigawatts in 2013, a compound annual growth rate of 43 percent, according to a new 2009 report from IC Insights, Solar Energy: Growth Opportunities for the Semiconductor Industry.

With this growth, the TF share of total solar photovoltaic devices sold will increase from 14 percent in 2008 to a forecast 27 percent in 2013, according to the report (see Fig. 1 below).

While TF is expected to continue gaining share, the Solar Energy report shows the forecast rate of growth is significantly lower than many recent solar industry forecasts. There are a number of factors behind this prediction.

TF panel makers have struggled to push panel efficiencies above about 11 percent, despite research-lab devices with efficiencies ranging from 16-20 percent. These higher efficiencies have been difficult to achieve in volume production, and there is little indication so far of a breakthrough in this regard.

Thus, despite their lower cost per watt, TF panels are predominantly used in large-scale ground based utility installations, where a large amount of space is available. In almost all rooftop applications, panels made with silicon-wafer-based solar cells are more attractive because their higher efficiency, ranging from 14-21 percent, means that more power can be generated for a limited rooftop area.

The political clout of electric utilities will undoubtedly draw government dollars toward large-scale solar installations. However, the Solar Energy report suggests that it is arguably the best use of solar technology to distribute small arrays on rooftops, close to the point of power consumption, where it reduces the costs and power losses associated with transmission and distribution lines. The better government policymakers understand this, the better the incentives should be for solar suppliers with the best rooftop products.

The Solar Energy report goes on to show that after several years of stellar growth—capped by a 99 percent growth year in 2008—the solar industry is being slammed during the current economic downturn.

IC Insights believes that after a 22 percent drop in installed megawatts of solar PV capacity during 2009, strong growth will return in 2010, as new government incentive programs gain traction in the US, Asia, and Europe. But with weakened government support during 2009, seriously lean conditions are driving solar device makers to re-evaluate and re-tune their strategies for increasing the value they can deliver per dollar.

A big factor coming to the aid of wafer-based cell makers is a big increase in available polysilicon supplies in 2008, 2009, and 2010. Freed of the capacity constraints for wafers and with silicon costs dropping, wafer-based solar cell makers will concentrate on improvements in device design and manufacturing techniques that allow them to drive device efficiency up and cost-per-watt down. Several suppliers have said that they will be bringing higher-efficiency cells to market, including a number of new back-contact cell designs.

Other key findings in Solar Energy: Growth Opportunities for the Semiconductor Industry:

* Pricing for solar panels will take a big step down in 2009, and then return to moderate decreases in price per watt over the remainder of the 2009-2013 forecast period.

* Competition is great among solar PV suppliers, with the top supplier in 2008 holding only 9 percent of the market, and 13 other suppliers each with 4 percent or more. IC Insights expects supplier rankings to continue to change.

* Solar-grade polysilicon will remain in oversupply throughout the forecast period. New sources of lower-cost supplies, such as upgraded metallurgical grade (UMG) silicon, will help drive down wafer costs.

* Equipment suppliers to the new solar device industry must re-tune their business as device makers struggle with ballooning inventories and plummeting capacity utilization.

Solar Energy: Growth Opportunities for the Semiconductor Industry was written to help current semiconductor manufacturers and suppliers gain a clearer understanding of solar technology and markets as they consider exploiting existing and upcoming opportunities available in the fast-growing solar PV sector.

It contains five-year forecasts for photovoltaic cells, solar modules, PV pricing trends, semiconductors in solar systems, PV-production capacity, capital expenditures, and polysilicon sales for PV cells. Regional market trends along with profiles and ranking of the industry’s top 15 photovoltaic device suppliers are also covered in the new report.

Single-user copies of the 118-page report sells for $2,975 with each additional copy priced at $495. A multi-user corporate license is available for $5,880.

Source: IC Insights, USA