PHOENIX, USA: While the US is still floundering with ad-hoc investments in clean energy, China has developed a straight-forward, no-nonsense approach to reaching 2GW solar capacity by 2011.
It is gaining strong leadership in the solar industry by investing heavily in manufacturing and incentivizing installation. Chinese companies like, Suntech Power Holdings, (NYSE: STP) have succeeded in driving solar panel price reductions over the last six months by selling panels on the US market below the marginal cost. Further, China is circumventing protectionist legislation by constructing assembly plants in the US.
Evolution Solar is setting down roots in China to take advantage of this shift in the center of gravity for the solar industry. In the last century, the United States was the home of most TV manufacturers. By the end of the century, there were none left in America. They were all in Asia!
The same is happening with solar energy and Evolution Solar Corp. (EVSO) has positioned itself to be a resource to the green energy revolution from its new base in China.
“China has made a commitment to solar and placed substantial funds behind that commitment,” stated Robert Kaapke, CEO of Evolution Solar. “Talking about change is very different form actually changing; we want to be part of real change and that is why we are setting down our roots where real change is taking place.”
Nearly all solar providers in America will source parts and components from China in the years ahead. EVSO expects to position itself to compete with producers, such as SunTech and Energy Conversion Devices for a part of this market.
Showing posts with label Suntech. Show all posts
Showing posts with label Suntech. Show all posts
Wednesday, September 2, 2009
Wednesday, August 12, 2009
Previously committed capacity expansions cause solar cell manufacturing oversupply!
AUSTIN, USA: According to DisplaySearch's Q3’09 Quarterly PV Cell Capacity Database & Trends Report, solar cell manufacturing capacity is likely to grow 56 percent in 2009 to 17GW. Ramped capacity, which was only 2.3GW in 2005, is forecast to grow at a CAGR of 49 percent to more than 42GW in 2013.
"Despite PV module demand shrinking 17 percent in 2009, so much cell manufacturing equipment was ordered and installed over the past year that capacity is still expected to grow 56 percent this year," said Charles Annis, DisplaySearch Vice President of Manufacturing Research and author of the report.
"With demand and capacity moving in different directions, the PV industry is currently experiencing an enormous over-supply that is causing rapid price erosion and potentially setting the stage for the failure of multiple cell manufacturers, particularly companies pursuing a-Si thin film solar cells.
"The PV industry will begin working through this excess capacity as demand recovers next year and takes off in 2011 and beyond.”
Here are just some of the many highlights from the Q3’09 Quarterly PV Cell Capacity Database & Trends Report:
* Through 2006, Japan had the largest solar cell production capacity in the world. However, Chinese companies started to ramp up a host of new facilities in 2005 and by 2007 had more solar cell capacity on line than any other country.
China has continued to invest heavily in production facilities, about a third of the worldwide cell capacity in 2009 and is forecast to be the main region for cell production well into the future.
* Of the 3.58GW of thin film capacity available in 2009, more than 30 percent use 600×1200 mm glass substrates, the standard CdTe glass size used by First Solar.
Gen 5-equivalent substrates, ranging from 1000×1200 to 1100×1400 mm, are the second most common glass size, used for 18 percent of available thin film capacity.
* Between January 2008 and July 2009, approximately 11.4GW of new solar cell capacity was installed in fabs around the world. These previous investment commitments are the reason that capacity is continuing to grow 56 percent in 2009 despite falling demand.
* In 2005, 95 percent of solar cell manufacturing capacity was for crystalline silicon solar cells and 5 percent for thin-film solar cells. In 2009, thin film will account for more than 20 percent of capacity.
By 2013, thin film technologies are forecast to account for as much as 30 percent of solar cell capacity.
* For a-Si factories, in 2009 the four largest turn-key equipment vendors are AMAT, Oerlikon ULVAC and EPV, representing 946MW of ramped capacity or more than 50 percent of a-Si capacity online this year.
* In terms of capacity available for production in 2009, First Solar is the largest solar cell manufacturer with more than 1GW of capacity. Q-Cells and Suntech are not far behind and essentially tied for second place. These and other current leading PV cell manufacturers are forecast to invest at the highest rates over the next four years.
By 2013, these three companies plus JA Solar, Motech, REC, SunPower, Yingli, Showa Shell Solar (assuming it moves forward with a planned 1GW CIGS fab), and Sharp are forecast to be the top 10 makers, with more than 16GW or 38 percent of 2013 capacity.
"Despite PV module demand shrinking 17 percent in 2009, so much cell manufacturing equipment was ordered and installed over the past year that capacity is still expected to grow 56 percent this year," said Charles Annis, DisplaySearch Vice President of Manufacturing Research and author of the report.
"With demand and capacity moving in different directions, the PV industry is currently experiencing an enormous over-supply that is causing rapid price erosion and potentially setting the stage for the failure of multiple cell manufacturers, particularly companies pursuing a-Si thin film solar cells.
"The PV industry will begin working through this excess capacity as demand recovers next year and takes off in 2011 and beyond.”
Here are just some of the many highlights from the Q3’09 Quarterly PV Cell Capacity Database & Trends Report:
* Through 2006, Japan had the largest solar cell production capacity in the world. However, Chinese companies started to ramp up a host of new facilities in 2005 and by 2007 had more solar cell capacity on line than any other country.
China has continued to invest heavily in production facilities, about a third of the worldwide cell capacity in 2009 and is forecast to be the main region for cell production well into the future.
* Of the 3.58GW of thin film capacity available in 2009, more than 30 percent use 600×1200 mm glass substrates, the standard CdTe glass size used by First Solar.
Gen 5-equivalent substrates, ranging from 1000×1200 to 1100×1400 mm, are the second most common glass size, used for 18 percent of available thin film capacity.
* Between January 2008 and July 2009, approximately 11.4GW of new solar cell capacity was installed in fabs around the world. These previous investment commitments are the reason that capacity is continuing to grow 56 percent in 2009 despite falling demand.
* In 2005, 95 percent of solar cell manufacturing capacity was for crystalline silicon solar cells and 5 percent for thin-film solar cells. In 2009, thin film will account for more than 20 percent of capacity.
By 2013, thin film technologies are forecast to account for as much as 30 percent of solar cell capacity.
* For a-Si factories, in 2009 the four largest turn-key equipment vendors are AMAT, Oerlikon ULVAC and EPV, representing 946MW of ramped capacity or more than 50 percent of a-Si capacity online this year.
* In terms of capacity available for production in 2009, First Solar is the largest solar cell manufacturer with more than 1GW of capacity. Q-Cells and Suntech are not far behind and essentially tied for second place. These and other current leading PV cell manufacturers are forecast to invest at the highest rates over the next four years.
By 2013, these three companies plus JA Solar, Motech, REC, SunPower, Yingli, Showa Shell Solar (assuming it moves forward with a planned 1GW CIGS fab), and Sharp are forecast to be the top 10 makers, with more than 16GW or 38 percent of 2013 capacity.
Tuesday, August 11, 2009
Half of all solar panels made this year won’t be installed in 2009!
EL SEGUNDO, USA: How bad is the solar panel glut?
* So bad that nearly half of all panels made this year won’t be sold in 2009.
* So bad that the present massive oversupply of panels will persist until 2012.
* So bad that iSuppli Corp. is now reducing its forecast for solar panel production out to the year 2013.
“The solar industry in 2009 has been undermined by collapse in demand due to the decision by Spain—which accounted for 50 percent of worldwide installations in 2008—to change its feed-in-tariff policies,” said Henning Wicht, senior director and principal analyst for photovoltaics at iSuppli.
“This demand drop led to a massive buildup of inventory throughout the supply chain, from the raw material polysilicon, to PV cells, to complete solar systems. Despite this, solar panel makers have continued to increase capacity and production, exacerbating the inventory buildup.”
Total solar panel production in 2009 will grow by 14.3 percent to 7.5 Gigawatts (GW), up from 6.5GW in 2008. However, only 3.9 GW worth of installations will take place this year. That means that almost one out of every two panels produced in 2009 will not be installed but stored in inventory.
“This inventory glut will have a long-term impact on the solar business, with panels set to remain in a state of oversupply until 2012,” Wicht said. “After that year, fast-growing demand for solar installations will be able to absorb global panel production and inventory.
iSuppli’s updated forecast now shows supplier production flattening for the years from 2011 through 2013 compared to the old forecast.”
The figure presents iSuppli’s previous and updated forecasts for solar panel production in terms of GW.
iSuppli: Previous and Current Global Solar Panel Production Forecasts in Gigawatts (Crystalline and Thin Film)
Source: iSuppli Aug. 2009
Still ramping?
Despite the global economic recession, most of the leading producers of solar panels -— such as Suntech, Sharp and JA Solar -— will continue to grow in concert with the overall PV industry, although they have no intention of slowing production of cells and panels.
“Even in the face of the downturn, many panel and cell producers have continued to ramp up their capacities as if a recession had never occurred,” Wicht said. “Most companies are doing this in order to maintain their share in the market.”
As a result, Suntech will push Q-Cells aside and become the No.-1 producer of crystalline cells in 2009, iSuppli predicts. Sharp, Yingli and JA Solar also will defend their Top-5 positions this year by not reducing their solar-cell production increases.
Those suppliers that have reduced or made adjustments to their production of cells and panels as a result of the softening demand have seen their short- and mid-term strategies falter. These suppliers include Q-Cells, SunPower and BP Solar.
Q-Cells, in particular, slowed down cell and panel expansion at its plant in Malaysia and has significantly reduced production targets in 2009. Likewise, SunPower has cut back its plans for expansion, while BP Solar has closed its panel production operations in Malaysia and Spain.
So, while some companies are hiking up production in order to maintain their positions in the market, others are forced to undertake short-term production cuts and delay or even cancel long-term expansion projects.
* So bad that nearly half of all panels made this year won’t be sold in 2009.
* So bad that the present massive oversupply of panels will persist until 2012.
* So bad that iSuppli Corp. is now reducing its forecast for solar panel production out to the year 2013.
“The solar industry in 2009 has been undermined by collapse in demand due to the decision by Spain—which accounted for 50 percent of worldwide installations in 2008—to change its feed-in-tariff policies,” said Henning Wicht, senior director and principal analyst for photovoltaics at iSuppli.
“This demand drop led to a massive buildup of inventory throughout the supply chain, from the raw material polysilicon, to PV cells, to complete solar systems. Despite this, solar panel makers have continued to increase capacity and production, exacerbating the inventory buildup.”
Total solar panel production in 2009 will grow by 14.3 percent to 7.5 Gigawatts (GW), up from 6.5GW in 2008. However, only 3.9 GW worth of installations will take place this year. That means that almost one out of every two panels produced in 2009 will not be installed but stored in inventory.
“This inventory glut will have a long-term impact on the solar business, with panels set to remain in a state of oversupply until 2012,” Wicht said. “After that year, fast-growing demand for solar installations will be able to absorb global panel production and inventory.
iSuppli’s updated forecast now shows supplier production flattening for the years from 2011 through 2013 compared to the old forecast.”
The figure presents iSuppli’s previous and updated forecasts for solar panel production in terms of GW.
iSuppli: Previous and Current Global Solar Panel Production Forecasts in Gigawatts (Crystalline and Thin Film)
Source: iSuppli Aug. 2009Still ramping?
Despite the global economic recession, most of the leading producers of solar panels -— such as Suntech, Sharp and JA Solar -— will continue to grow in concert with the overall PV industry, although they have no intention of slowing production of cells and panels.
“Even in the face of the downturn, many panel and cell producers have continued to ramp up their capacities as if a recession had never occurred,” Wicht said. “Most companies are doing this in order to maintain their share in the market.”
As a result, Suntech will push Q-Cells aside and become the No.-1 producer of crystalline cells in 2009, iSuppli predicts. Sharp, Yingli and JA Solar also will defend their Top-5 positions this year by not reducing their solar-cell production increases.
Those suppliers that have reduced or made adjustments to their production of cells and panels as a result of the softening demand have seen their short- and mid-term strategies falter. These suppliers include Q-Cells, SunPower and BP Solar.
Q-Cells, in particular, slowed down cell and panel expansion at its plant in Malaysia and has significantly reduced production targets in 2009. Likewise, SunPower has cut back its plans for expansion, while BP Solar has closed its panel production operations in Malaysia and Spain.
So, while some companies are hiking up production in order to maintain their positions in the market, others are forced to undertake short-term production cuts and delay or even cancel long-term expansion projects.
Monday, May 11, 2009
Suntech joins PV CYCLE Association to develop solar module recycling program
SCHAFFHAUSEN, SWITZERLAND & WUXI, CHINA: Suntech Power Holdings Co. Ltd, the world's largest manufacturer of crystalline silicon photovoltaic (PV) modules, announced that it has joined the PV CYCLE association which is engaged in establishing a voluntary take-back and recycling program for end-of-life PV modules.
"Sustainability and minimizing the impact of energy generation on the environment are two of the key principles driving the development of solar energy," said Jerry Stokes, Suntech's Vice President of Strategy and Business Development. "We believe that module life-cycle management and comprehensive recycling is a natural extension of these concepts."
"With over 1.1GW of Suntech solar products shipped worldwide since our inception, we believe it is essential that Suntech take a proactive role in developing effective recycling programs. We are looking forward to collaborating with the PV CYCLE association and further developing our internal module recycling initiative," added Mr. Stokes.
"PV CYCLE welcomes Suntech as the latest member to our Association, which now covers around 80 percent of the European photovoltaic market with its 35 member companies spread around the globe. We look forward to seeing many more members joining our voluntary take-back and recycling program. We need to ensure the inclusion of all photovoltaic manufacturers and importers enforcing and maximizing the representation of our responsibility as producers. Doing so will make the photovoltaic industry truly DoubleGreen," declared Jan Clyncke, Managing Director of PV CYCLE aisbl.
PV modules are designed to generate clean, renewable energy for over 25 years. With the first significant installations in the early 1990s, full-scale end-of-life recycling is still another 10 to 15 years away.
Nevertheless, the PV CYCLE Association is already developing concrete plans to develop a recycling program that minimizes waste and maximizes re-use of valuable resources such as glass, silicon and aluminum.
PV CYCLE was founded in 2007 with the specific purpose of implementing the photovoltaic industry's commitment to set up a voluntary take-back and recycling program for end-of-life waste PV modules.
To produce green and renewable energy, end-of-life modules need to be recovered and recycled. This will minimise waste and allow the re-use of valuable raw materials to produce new modules.
By closing the life cycle of photovoltaic modules, industry players take their responsibility and are "Making the photovoltaic industry DoubleGreen."
"Sustainability and minimizing the impact of energy generation on the environment are two of the key principles driving the development of solar energy," said Jerry Stokes, Suntech's Vice President of Strategy and Business Development. "We believe that module life-cycle management and comprehensive recycling is a natural extension of these concepts."
"With over 1.1GW of Suntech solar products shipped worldwide since our inception, we believe it is essential that Suntech take a proactive role in developing effective recycling programs. We are looking forward to collaborating with the PV CYCLE association and further developing our internal module recycling initiative," added Mr. Stokes.
"PV CYCLE welcomes Suntech as the latest member to our Association, which now covers around 80 percent of the European photovoltaic market with its 35 member companies spread around the globe. We look forward to seeing many more members joining our voluntary take-back and recycling program. We need to ensure the inclusion of all photovoltaic manufacturers and importers enforcing and maximizing the representation of our responsibility as producers. Doing so will make the photovoltaic industry truly DoubleGreen," declared Jan Clyncke, Managing Director of PV CYCLE aisbl.
PV modules are designed to generate clean, renewable energy for over 25 years. With the first significant installations in the early 1990s, full-scale end-of-life recycling is still another 10 to 15 years away.
Nevertheless, the PV CYCLE Association is already developing concrete plans to develop a recycling program that minimizes waste and maximizes re-use of valuable resources such as glass, silicon and aluminum.
PV CYCLE was founded in 2007 with the specific purpose of implementing the photovoltaic industry's commitment to set up a voluntary take-back and recycling program for end-of-life waste PV modules.
To produce green and renewable energy, end-of-life modules need to be recovered and recycled. This will minimise waste and allow the re-use of valuable raw materials to produce new modules.
By closing the life cycle of photovoltaic modules, industry players take their responsibility and are "Making the photovoltaic industry DoubleGreen."
Monday, April 27, 2009
EVSO: Texas launches $500 million solar subsidy
PHOENIX, USA: Evolution Solar Corp. said that the Texas Senate just approved one of the largest subsidy programs for solar power in the United States.
The program mandates a 60 percent increase in alternative energy from sources other than wind over the next five years. The program is likely to result in an additional 200-500 megawatts of solar power in the State of Texas. (There are currently 590 MW of solar power generated nationwide).
"The Texas legislature has made it clear that the State has put out the welcome mat for companies such as Evolution Solar who are committed to expanding solar capacity in the United States," stated Robert Kaapke, CEO of Evolution Solar Corp. “This new initiative will put Texas in the forefront of states that provide solar incentives and help make Texas the leader in solar power as it already is in wind generation.”
Texas is expected to attract solar manufactures with its new incentives as well as installations from companies such as SunTech and Energy Conversion Devices.
The program mandates a 60 percent increase in alternative energy from sources other than wind over the next five years. The program is likely to result in an additional 200-500 megawatts of solar power in the State of Texas. (There are currently 590 MW of solar power generated nationwide).
"The Texas legislature has made it clear that the State has put out the welcome mat for companies such as Evolution Solar who are committed to expanding solar capacity in the United States," stated Robert Kaapke, CEO of Evolution Solar Corp. “This new initiative will put Texas in the forefront of states that provide solar incentives and help make Texas the leader in solar power as it already is in wind generation.”
Texas is expected to attract solar manufactures with its new incentives as well as installations from companies such as SunTech and Energy Conversion Devices.
Tuesday, April 21, 2009
Photovoltaics International's solar awards on May 28
Photovoltaics International, a leading source for technical manufacturing information and news concerning the solar industry, has partnered with the International Photovoltaic Equipment Association, PV Group, and Sun & Wind Energy among others to introduce the International Solar Technology Awards, a new set of industry awards recognizing significant achievements in the production of solar technology.
Nominations closed on April 15. Winners will be honored at the awards ceremony at Intersolar in Munich on May 28, 2009.
Unlike current industry awards that focus primarily on early stage solar technologies, the International Solar Technology Awards are designed to put the spotlight on companies spanning the manufacturing supply chain from raw materials to modules. Judges from Q-Cells, Suntech, Deutsche Solar, Moser Baer, Fraunhofer ISE and others will select award recipients on their efficiency advancements, improved design and processes.
The eight International Solar Technology Award categories are:
* Best Technical Product for Module Assembly.
* Best Technical Product for Thin-Film Module Manufacturing.
* Best Process Technology for c-Si Cell Manufacturing Lines.
* Best Technology for Silicon Feedstock and Wafer Processes.
* Best New Manufacturing Facility for Cells, Modules, Equipment and BOS Components.
* Best Region for Manufacturing Solar Technologies.
* Green Manufacturing Award.
* Industry Choice Award.
“We created the International Solar Technology Awards to serve as a catalyst for new business opportunities through enhanced industry visibility,” said David Owen, Managing Director of Photovoltaics International. “By bringing together some of the most prestigious names in the solar space, we strive to provide the solar manufacturing industry with an unbiased, well respected recognition to showcase industry leaders.”
To apply for The International Solar Technology Awards and to learn more on award criteria and benefits, visit: http://www.cellaward.com/.
If you are a member of the solar industry and would like to register to vote for The International Solar Technology Awards, visit http://www.cellaward.com/register_to_vote.
Nominations closed on April 15. Winners will be honored at the awards ceremony at Intersolar in Munich on May 28, 2009.
Unlike current industry awards that focus primarily on early stage solar technologies, the International Solar Technology Awards are designed to put the spotlight on companies spanning the manufacturing supply chain from raw materials to modules. Judges from Q-Cells, Suntech, Deutsche Solar, Moser Baer, Fraunhofer ISE and others will select award recipients on their efficiency advancements, improved design and processes.
The eight International Solar Technology Award categories are:
* Best Technical Product for Module Assembly.
* Best Technical Product for Thin-Film Module Manufacturing.
* Best Process Technology for c-Si Cell Manufacturing Lines.
* Best Technology for Silicon Feedstock and Wafer Processes.
* Best New Manufacturing Facility for Cells, Modules, Equipment and BOS Components.
* Best Region for Manufacturing Solar Technologies.
* Green Manufacturing Award.
* Industry Choice Award.
“We created the International Solar Technology Awards to serve as a catalyst for new business opportunities through enhanced industry visibility,” said David Owen, Managing Director of Photovoltaics International. “By bringing together some of the most prestigious names in the solar space, we strive to provide the solar manufacturing industry with an unbiased, well respected recognition to showcase industry leaders.”
To apply for The International Solar Technology Awards and to learn more on award criteria and benefits, visit: http://www.cellaward.com/.
If you are a member of the solar industry and would like to register to vote for The International Solar Technology Awards, visit http://www.cellaward.com/register_to_vote.
Friday, January 16, 2009
Dramatic price forecast to reshape PV industry: iSuppli
I was very fortunate to attend a webinar on solar PV a couple of days back, thanks to iSuppli, USA. The webinar looked at:
* Polysilicon -- what is going on in the market?
* Cells and modules -- where will the prices go?
Dr. Henning Wicht, senior director and principal analyst, iSuppli, made it clear that the intention was to show what's coming out of primary industry research.
He said: "We believe that solar is a fantastic market. It has been growing over the last four years by revenue. It will continue to grow! There are not many industries with a growth path like that! However, in last the 18 months, the supply has been disconnected from demand."
This is exactly the point iSuppli addressed in its webinar. Dr. Wicht was accompanied by Stefan de Haan, senior analyst, photovoltaics, iSuppli.
iSuppli's recent findings are:
* Severe supply chain imbalances exist at polysilicon/wafer and cell/module levels.
* Short term polysilicon and module prices will decrease significantly.
Polysilicon: What's going on with supply and pricing?
If you looked at the global solar PV industry, many plants are under construction, and there are huge capacity expansion plans. There has been a dramatic decrease in production. In 2008, iSuppli estimated total production of solar PV at 60,000 metric tons. In 2009, about 100,000 metric tons will be produced!
What are the reasons for this supply situation? In 2005-06, the high margins of this industry attracted several newcomers. The cycle time to ramp up a polysilicon plant is 24-36 months, and including another 12 months to get finance, it takes about four years.
He said: "The decisions taken in year 2005-06 are coming to the market now. This is also why we see the big ramp in 2009-10. This is also the reason why the industry will have big difficulties to react on a short term notice. The polysilicon industry is a big super tanker, which has difficulties to maneuver on short term."
Looking at the demand side of things, iSuppli showed a graph where the two curves -- polysilicon supply and polysilicon demand meet, or rather cross, in early 2010. From that point on, the supply line passes the demand line. "That means, from that time onward, we definitely see prices for polysilicon decreasing," he said.
What will happen in 2009?
The key point to note is that the ramping rates of polysilicon and solar cells are completely different! The ramping rate of polysilicon is much steeper, than on the cell side. Polysilicon is more than doubling, while the cell industry is growing at 34 percent.
According to Dr. Wicht, the gap between demand and supply is already shrinking fast in 2009, which will lead to a price decrease in 2009.
Coming to prices, the polysilicon market boasts two kinds of prices -- long term and spot market. According to Dr. Wicht, the long term prices are already decreasing from around $100/kg in 2008, and it is expected to be around $80/kg in 2009.
On the other hand, the spot market price peaked in 2008 at around $400/kg. Now, it has already dropped. It will continue to drop, far beyond today's long term contract price, which will then, from 2010 onward, make up another round of discussion. This is because companies might tend to get out of their long term contracts to secure their silicon on the spot!
Summarizing, he said that polysilicon production will increase heavily. Next, supply will pass demand from 2010 onward, and then the industry will enter the oversupply situation for the next three to four years. The polysilicon industry will also react. In fact, iSuppli anticipates a recent announcement from a solar PV company to expand production capacity would be the last for quite a while!
What about projects on the way? These projects have to come on to the market and many of those will! This is precisely the reason why the industry will see silicon passing solar cells in capacity over the next few years.
Stefan de Haan added that the output of the PV modules industry will grow. The total module prod will likely grow to 11GW this year and to 20GW in 2012. Thin film modules will continuously gain market share and it probably account for 1/3rd of the total market by 2012. Production of crystalline cells will run in parallel. It is likely to reach 9GW for 2009 and 18GW for 2012.
Commenting on the competitive landscape, he added that many new players would be entering production in 2009, especially in the thin film business. "However, the current leaders -- QCells, Suntech and First Solar -- will increase their edge over the competition in terms of absolute production volumes," he said.
In general, it is a good thing that the industry is growing and that all of this capacity is coming online. However, this raises the question: can demand can keep up with the supply?
According to iSuppli, in 2009, the installation market will be flattening. In the sense, iSuppli projects that 4.2GW will be installed this year, or about 10 percent growth. However, this growth is much smaller in comparison to the previous years. Some of the reasons for slower growth in 2009 include changes in sustained feed-in tariffs and the global economic slowdown.
Hann added, "In H2-2010, module demand will probably return to the previous growth rates, of more than 20 percent per year."
Combining demand and supply, there is a massive oversupply of modules that has already been building up since early 2008. Back in 2008, this did not impact on the module prices as there was short term heavy demand from countries like Germany and Spain, from project developers and installation companies, etc. So, this was not noticeable earlier. However, in 2009, the oversupply situation is quite serious!
As a consequence, many suppliers will not be able to react to this situation in the short term. They will still need to run their factories to try and generate some revenue and satisfy the industry. Many had bet on some strong demand coming from USA and also China.
This year, the module prices will decline. Consequently, the declining prices will also create some additional demand. However, for the next two years, this fundamental oversupply situation will not change.
How far will prices drop?
So, what are the message for 2009? First, crystalline module prices will drop to about $2.50 per watt, and second, cost is going to be the differentiating factor! This was a point emphasized strongly by the iSuppli analysts.
Further, how should companies manage this situation, where supply is disconnected by demand? According to Dr. Wicht, there is 11.1GW of module supply vs. 4.2GW of installations. "We do not see that the demand is elastic and that everything will be good after the end of 2009. The gap is too large between demand and supply, and will last till end of 2010."
Installation capacity will surely become a bottleneck. There will be falling prices for silicon, as well as solar cells and modules. Also, the demand is not that elastic enough to absorb all modules produced.
Therefore, given this situation, what are the options for success, rather, what are the ideas to re-orient the solar PV business?
The first option could be to shut down 50 percent of production till price recovers. However, this is not a realistic option. Another could be to put expansion plans on hold. Yet another option for producers would be to become the best in class in production cost, an option, which is excellent, but difficult!
Probably, the best option would be for makers to integrate downstream. This includes new demand simulation in established markets as well as developing new markets.
Dr. Wicht said: "Anticipating bottlenecks are key for solar. The next bottlenecks are the bureaucracy and installation capacity. The production capacity would not be influential. Production cost and downstream integration are key." He advised solar PV producers to monitor their PV market demand and supply situation regularly.
* Polysilicon -- what is going on in the market?
* Cells and modules -- where will the prices go?
Dr. Henning Wicht, senior director and principal analyst, iSuppli, made it clear that the intention was to show what's coming out of primary industry research. He said: "We believe that solar is a fantastic market. It has been growing over the last four years by revenue. It will continue to grow! There are not many industries with a growth path like that! However, in last the 18 months, the supply has been disconnected from demand."
This is exactly the point iSuppli addressed in its webinar. Dr. Wicht was accompanied by Stefan de Haan, senior analyst, photovoltaics, iSuppli.
iSuppli's recent findings are:
* Severe supply chain imbalances exist at polysilicon/wafer and cell/module levels.
* Short term polysilicon and module prices will decrease significantly.
Polysilicon: What's going on with supply and pricing?
If you looked at the global solar PV industry, many plants are under construction, and there are huge capacity expansion plans. There has been a dramatic decrease in production. In 2008, iSuppli estimated total production of solar PV at 60,000 metric tons. In 2009, about 100,000 metric tons will be produced!
What are the reasons for this supply situation? In 2005-06, the high margins of this industry attracted several newcomers. The cycle time to ramp up a polysilicon plant is 24-36 months, and including another 12 months to get finance, it takes about four years.
He said: "The decisions taken in year 2005-06 are coming to the market now. This is also why we see the big ramp in 2009-10. This is also the reason why the industry will have big difficulties to react on a short term notice. The polysilicon industry is a big super tanker, which has difficulties to maneuver on short term."
Looking at the demand side of things, iSuppli showed a graph where the two curves -- polysilicon supply and polysilicon demand meet, or rather cross, in early 2010. From that point on, the supply line passes the demand line. "That means, from that time onward, we definitely see prices for polysilicon decreasing," he said.
What will happen in 2009?
The key point to note is that the ramping rates of polysilicon and solar cells are completely different! The ramping rate of polysilicon is much steeper, than on the cell side. Polysilicon is more than doubling, while the cell industry is growing at 34 percent.
According to Dr. Wicht, the gap between demand and supply is already shrinking fast in 2009, which will lead to a price decrease in 2009.
Coming to prices, the polysilicon market boasts two kinds of prices -- long term and spot market. According to Dr. Wicht, the long term prices are already decreasing from around $100/kg in 2008, and it is expected to be around $80/kg in 2009.
On the other hand, the spot market price peaked in 2008 at around $400/kg. Now, it has already dropped. It will continue to drop, far beyond today's long term contract price, which will then, from 2010 onward, make up another round of discussion. This is because companies might tend to get out of their long term contracts to secure their silicon on the spot!
Summarizing, he said that polysilicon production will increase heavily. Next, supply will pass demand from 2010 onward, and then the industry will enter the oversupply situation for the next three to four years. The polysilicon industry will also react. In fact, iSuppli anticipates a recent announcement from a solar PV company to expand production capacity would be the last for quite a while!
What about projects on the way? These projects have to come on to the market and many of those will! This is precisely the reason why the industry will see silicon passing solar cells in capacity over the next few years.
Stefan de Haan added that the output of the PV modules industry will grow. The total module prod will likely grow to 11GW this year and to 20GW in 2012. Thin film modules will continuously gain market share and it probably account for 1/3rd of the total market by 2012. Production of crystalline cells will run in parallel. It is likely to reach 9GW for 2009 and 18GW for 2012.
Commenting on the competitive landscape, he added that many new players would be entering production in 2009, especially in the thin film business. "However, the current leaders -- QCells, Suntech and First Solar -- will increase their edge over the competition in terms of absolute production volumes," he said.
In general, it is a good thing that the industry is growing and that all of this capacity is coming online. However, this raises the question: can demand can keep up with the supply?
According to iSuppli, in 2009, the installation market will be flattening. In the sense, iSuppli projects that 4.2GW will be installed this year, or about 10 percent growth. However, this growth is much smaller in comparison to the previous years. Some of the reasons for slower growth in 2009 include changes in sustained feed-in tariffs and the global economic slowdown.
Hann added, "In H2-2010, module demand will probably return to the previous growth rates, of more than 20 percent per year."
Combining demand and supply, there is a massive oversupply of modules that has already been building up since early 2008. Back in 2008, this did not impact on the module prices as there was short term heavy demand from countries like Germany and Spain, from project developers and installation companies, etc. So, this was not noticeable earlier. However, in 2009, the oversupply situation is quite serious!
As a consequence, many suppliers will not be able to react to this situation in the short term. They will still need to run their factories to try and generate some revenue and satisfy the industry. Many had bet on some strong demand coming from USA and also China.
This year, the module prices will decline. Consequently, the declining prices will also create some additional demand. However, for the next two years, this fundamental oversupply situation will not change.
How far will prices drop?
So, what are the message for 2009? First, crystalline module prices will drop to about $2.50 per watt, and second, cost is going to be the differentiating factor! This was a point emphasized strongly by the iSuppli analysts.
Further, how should companies manage this situation, where supply is disconnected by demand? According to Dr. Wicht, there is 11.1GW of module supply vs. 4.2GW of installations. "We do not see that the demand is elastic and that everything will be good after the end of 2009. The gap is too large between demand and supply, and will last till end of 2010."
Installation capacity will surely become a bottleneck. There will be falling prices for silicon, as well as solar cells and modules. Also, the demand is not that elastic enough to absorb all modules produced.
Therefore, given this situation, what are the options for success, rather, what are the ideas to re-orient the solar PV business?
The first option could be to shut down 50 percent of production till price recovers. However, this is not a realistic option. Another could be to put expansion plans on hold. Yet another option for producers would be to become the best in class in production cost, an option, which is excellent, but difficult!
Probably, the best option would be for makers to integrate downstream. This includes new demand simulation in established markets as well as developing new markets.
Dr. Wicht said: "Anticipating bottlenecks are key for solar. The next bottlenecks are the bureaucracy and installation capacity. The production capacity would not be influential. Production cost and downstream integration are key." He advised solar PV producers to monitor their PV market demand and supply situation regularly.
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