Tuesday, February 12, 2013

10 key trends for global PV industry

Finlay Colville, vice president, NPD Solarbuzz, USA, recently presented the 10 key trends for the PV industry. According to him, the 10 key trends are:

1. PV demand growth. The industry has been characterized by strong growth rates of 25 percent to >100 percent Y/Y for the past decade. Now, the industry needs to plan for growth at more modest levels.

2. Globalization of PV demand. The emerging regions emerged for PV demand in 2012.

3. China end-market demand in 2013. China is forecast to account for approximately 25 percent global demand in 2013. The emerging demand is confined to a select group of countries across the three emerging regions.

4. Capacity imbalance reset. The nameplate capacity levels at the 60-GW level are often cited. However, the the PV industry currently has an ‘effective’ capacity of 41-42 GW. Therefore, demand needs to exceed 40 GW for proper reset.

5. Competitive shakeout. The top-10 module suppliers by MW for 2012 only comprised 50 percent of the year shipments. Also, a similar pattern is seen for c-Si cell production. We can expect another two years of shakeout on the supply side.
6. Cost and price rationalization. Every segment of the supply side is subject to price/cost pressure: from poly to BoS supply. Even reducing the silicon/nonsilicon costs of modules to 53c/W level by the end of 2013 may still result in negative gross margins.

7. Supply and demand rationalization. The poly suppliers have been operating at reduced utilization since 2H’12.

8. Evolution of PV technology roadmaps. Strong marketshare gains from standard c-Si multi ingot/wafers. The end-markets are driving module efficiencies and power ratings. The alternative growth methods have not gained traction and are being phased out.

9. Capital expenditure cyclic patterns. The PV process equipment suppliers have been impacted severely by overcapacity and overinvestments of 2010 and 2011. There is a strong chance that 2014 will end up as low as 2013. Also, technology-buy cycles don’t exist as yet in the PV industry.

10. Domestic protectionism counter measures. The effects of trade wars may yet have a profound effect on the PV industry into 2014. There will be direct effect of global overinvestment into domestic manufacturing. The other countries have an impact, but China and Europe decisions are key.

In summary, the PV industry is a 30-GW end-market today, and is forecast to grow to the 40-GW level in 2015. Europe demand is declining, but greater number of countries/territories expected to provide new PV demand. Demand in China during 2013 is essential for local suppliers.

The PV industry is capable of producing 12-15 GW per quarter. Supply and demand need a 40-GW+ market to balance. The shakeout phase is proceeding slowly, and will continue for the next two years. Reducing costs are not yet keeping up with price declines. ASP and ISP stabilization period is needed badly.

The end-market demand has become dependent on low ISPs. Also, multi c-Si based modules are dominating the industry. PV equipment suppliers are unlikely to see meaningful new order intake until 2014 or beyond. Finally, trade wars and domestic protectionism measures are crucially dependent on the EU and China decisions in 2013.

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