Thanks to David Jourdan at Yole Développement, Lyon, France, I recently participated in a presentation made by Arnaud Duteil, market analyst, photovoltaic technologies, Yole, titled: PV Equipment – What’s Next? According to Yole’s analyst:
• Until the end of 2008, optimistic demand has pushed industrials to expand their fabsquickly and has thus disconnected capacity from the real market.
• Low average utilization rates are affecting cash flow of numerous players. Initial expansion plans are delayed and cell/module makers are focusing on selling stocks.
• Equipment market has been growing very fast and is now being impacted by this industry slow down. The market will be pushed again in 2010 by a strong restart of PV installations
• Equipment makers have been running after the market for several years. 2009 being a difficult period, they have turn the slowdown into an opportunity to increase their customer support and strengthen their knowledge directly on site.
• The focus is now on process optimization and innovation to continuously drive production costs down.
What’s the current situation?
There has been strong demand in 2007 and 2008, which triggered several fab extensions projects. Also, there were large investment plans across all the value chain — polysilicon, ingot and wafer, cell and module. As a result, at the end of 2008, the industry was big enough to supply:
– 12GWp of solar modules,
– 11GWp of wafers,
– 9 GWP of polysilicon
The equipment market reached 2.7 billion Euros in 2008 and will be down by 30 percent at 1.9 billion Euros. However, two key events changed the market in 2008 — the capping of Spanish incentive program and the global financial crisis.
Yole expects that module demand will reach 6.5GWp at the end of this year and about 5GWp of connected installations assuming 7gr of polysilicon per Wpand 14,5 percent efficiency at the module level.
In 2008, the policy forecast and market reality were not quite matching. There was also strong interest into FIT (feed-in tariffs) and a sturdy demand from the Spanish market led to high module prices. A flat growth has been expected in 2009 mainly because of the 500MW cap on Spanish installations, as well as due to the strong price adjustment.
Strong price elasticity is likely during 2010-11. Strong investments in silicon and cell production capacities will be operational. Also, prices will continue to drop while opening up new markets. In the optimistic scenario, Italy and California could reach grid parity by 2010.
Demand will likely take off in 2012-13. Large raw material availability and factory over-capacities will again force value chain players to lower their cost and reduce margins. Grid parity will be reached in several countries and unmatched demand will emerge.
However, Duteil cautioned that technical bottlenecks are expected on systems storage and electric grid adaptability.
PV equipment market
As for the equipment market, Yole believes that the gap between capacity and demand will negatively impact the equipment market for the next two years.
Assessing the equipment market from 2007 to 2013, in 2007-08, there was strong demand for thin film solution due to expensive polysilicon. It was important for growth of equipment market to match with demand.
In the period 2008-10, there is likely to be strong over-capacity, and low utilization rates are limiting new investments in fab extensions. However companies with proprietary design continue to increase their capacity, such as First Solar. Other examples of companies investing in turnkey solutions: Best Solar, Genesis Energy, KSK Surya PV, Signet Solar, Top Green Energy, etc. From 2011-13, demand for PV installations will trigger new capacities and boost the equipment market.
If turnkey and non-turnkey fabs are compared — a-Si and a-Si/μ-Si new capacity in 2009 — the TF turnkey lines market share is bigger than its C-Si counterpart. This is mainly because the turnkey providers lower technical barriers and thus help in diffusing the technology. Non-turnkey type production capacities will grow, thanks to key companies like First Solar, Solyndra or Abound Solar.
Yole, founded in 1998, is a market research, technology evaluation and strategy consulting company. Forty of its business is in the EU countries, while Asia and North America account for 30 percent each, respectively. Yole is and involved in the following fields:
* MEMS, including microfluidics.
* Photovoltaic, from equipment and materials to cell business.
* Compound semiconductor business (SiC, GaN, AlN, ZnO) –power devices, RF devices, LED, HB LED.
* Advanced packaging (3D IC, TSV, SoC, WLP).