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2009 global pv cell and module report

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  • 1. 2009 global pv Cell and Module produCtion analysis SHYAM MeHtA | GtM ReSeARcH GtM ReSeARcH Note GTM RESEARCH MAY 2010
  • 2. GTM RESEARCH MAY 2010 2009 PV PRoductioN: anotHer buMper year For ManuFaCturing Masks supplier turMoil This note discusses the results of GTM Research’s annual data collection process for global photovoltaic (PV) cell and module production in 2009. Overall, 2009 was the most challenging year for PV suppliers in recent memory, with severe initial oversupply (exacerbated by the evaporation of Spain as a market of any consequence and the loss of project financing) and drastic price drops. This consequently led to large losses, major layoffs, and the first wave of consolidation across the entire value chain. At the same time, 2009 was another record-breaking year for the global PV industry, with over 7 GW of modules installed, total module production of 8.95 GW, and cell production of 10.66 GW – a 51% increase over 2008 cell production of 7.05 GW (itself an 88% increase over 2007). As has been well-documented, the bulk of these modules ended up being deployed in Germany in the third and fourth quarters of 2009, with existing year-end digressions, the threat of more severe cuts, and module price declines (from $4.00 per watt in mid-2008 to $2.00 per watt by the end of 2009) all doing their part to drive an unprecedented installation volume of 1.3 GW in the last quarter of the year. Whereas in January, top manufacturers were reportedly running at utilizations of below 25%, October through December witnessed them being capacity-constrained. To call it a volatile year would be an understatement of sorts. CoPYRiGHT 2010, GREEnTECH MEdiA inC All RiGHTS RESERvEd 2009 CEll And ModulE PRoduCTion 2
  • 3. GTM RESEARCH MAY 2010 1 teCHnology trends: tHin FilM gains sHare oFF tHe baCk oF First solar Crystalline silicon (c-Si) PV cell production in 2009 was 8.02 GW, a 42% increase over 2008: as discussed below, the majority of these cells were manufactured in the low- cost locations of China and Taiwan. Total c-Si module production in 2009 was 6.3 GW. Overall, crystalline silicon still dominates the PV technology landscape, with a cell production share of 81% and a module production share of 78%: for cells, this breaks into a 75% share for “plain vanilla” mono- and multicrystalline cells, and a 6% share for high-efficiency “super” monocrystalline cells made by SunPower and Sanyo. 2009 was historic in that for the first time ever, a thin-film producer (cadmium telluride-based First Solar) claimed the title of the largest cell/module manufacturer. In a year where most producers considered themselves fortunate to expand marginally, First Solar doubled its production, from 504 MW in 2008 to a staggering 1,011 MW: alone, the company made up 10% of global supply. Thanks largely to the First Solar factor, thin film’s market share increased yet again from 14% to 19% in cells, and from 15% to 22% in modules. This top-line result masks the turmoil faced by almost every other thin-film producer in the space, as an abundance of cheap c-Si modules and lenders’ unwillingness to finance nascent companies and technologies combined to make life very difficult indeed: the top six thin-film producers made up almost 70% of production, while the rest were left with only scraps to feed on. As with the rest of the industry, however, Germany’s late surge benefited even these firms greatly: non-First Solar thin film production therefore also increased significantly, from 462 MW in 2008 to 970 MW. Overall, 2009 thin-film production stood at 1.98 GW, representing another doubling over the previous year’s production of 966 MW. Amorphous silicon constituted 40% of this, or 796 MW, with Sharp and United Solar the top producers in this segment. 2009 was also the first year to witness more than 100 MW of CIGS production (166 MW, to be exact), compared to only 74 MW in 2008: progress in CIGS is definitely occurring, albeit at a measured pace, thanks to the efforts of such producers as Solar Frontier (formerly known as Showa Shell Sekiyu), Wurth Solar, and the ever-controversial Solyndra. CoPYRiGHT 2010, GREEnTECH MEdiA inC All RiGHTS RESERvEd 2009 CEll And ModulE PRoduCTion 3
  • 4. GTM RESEARCH MAY 2010 FiGuRe 1-1: 2009 GlobAl PV cell PRoductioN bY tecHNoloGY (MW-dc) Source: GTM Research FiGuRe 1-2: 2009 Module PRoductioN bY tecHNoloGY (MW-dc) Source: GTM Research CoPYRiGHT 2010, GREEnTECH MEdiA inC All RiGHTS RESERvEd 2009 CEll And ModulE PRoduCTion 4
  • 5. GTM RESEARCH MAY 2010 2 regional trends: low-Cost loCations doMinate Breaking down 2009 production by region confirms what the industry has known for quite some time now: manufacturing cells and modules is now a game of low-cost production. This is especially true for standard crystalline silicon cells, which have become highly commoditized with little perceived differentiation across suppliers. Almost half (49%) of the cells made in 2009 came from China and Taiwan; when limited to crystalline silicon cells, this number jumps to 56%. With regard to modules, these numbers are slightly lower (40% share for all technologies and 47% for c-Si alone). The continued growth in Chinese and Taiwanese manufacturing has come at the expense of both European and Japanese producers. European cell production actually experienced a slight (1%) decline compared to 2008, and its production share, after remaining steadily in the mid-20% range through the last half-decade, dipped a full 10%, from 28% to 18%. This illustrates the fundamental disparity between cost structures: even the most established European producers incurred heavy losses in 2009 and were simply unable to compete profitably against aggressive pricing strategies adopted by Chinese firms, which correctly assessed the existing environment as an opportunity to steal share. Japanese producers expanded by 19%, aided no doubt by a resurgence in the Japanese market, which more than doubled in 2009 to reach 484 MW of demand. Still, overall share declined to just 14% for cells and a mere 10% for modules. This is a far cry from just five years ago, when Japanese firms made up over 50% of the market. U.S. share of global cell and module production remained relatively flat, at 6% and 9% respectively. As was the case in 2008, the bulk of this came from three producers: First Solar (CdTe) in Ohio, United Solar (a-Si) in Michigan, and Evergreen Solar (string ribbon) in Massachusetts. Thin film still comprised the majority (56%) of U.S. cell production, but lower compared to 2008 (68%). With more than 30 new manufacturing facilities set to come online in the U.S. in the next three years (most of them module plants), it will be interesting to see whether the U.S. becomes a more important player on a global scale, even if it ends up serving its own demand, which is the situation in anticipation of which most of these plants have been built. With a number of smaller c-Si module assembly lines, as well as VC-backed thin film firms ramping up production in coming years, the future technology mix in the U.S. is also an open question. CoPYRiGHT 2010, GREEnTECH MEdiA inC All RiGHTS RESERvEd 2009 CEll And ModulE PRoduCTion 5
  • 6. GTM RESEARCH MAY 2010 FiGuRe 2-1: 2009 GlobAl PV cell PRoductioN bY ReGioN (MW-dc) Source: GTM Research FiGuRe 2-2: 2009 GlobAl PV Module PRoductioN bY ReGioN (MW-dc) Source: GTM Research CoPYRiGHT 2010, GREEnTECH MEdiA inC All RiGHTS RESERvEd 2009 CEll And ModulE PRoduCTion 6
  • 7. GTM RESEARCH MAY 2010 3 top produCers: First solar First, not Many surprises With regard to cells, First Solar claimed pole position for cell manufacturing in 2009, with 1,011 MW of modules produced, mostly out of its giant facility in Malaysia (another low-cost location on account of the country’s generous tax holidays). The top four positions represent a permutation of sorts: Q-Cells, number one in 2008, fell to the #4 slot, while Sharp, Suntech Power, and First Solar each moved up one place. Numbers 5, 6, and 7 are occupied by Yingli, JA Solar, and Kyocera, respectively; again, the same three firms filled those slots in 2008, albeit in a different order. All in all, therefore, the top 15 list looks much the same as in 2008, with the net effect being Chinese firms moving up and European/Japanese firms (with the exception of Sharp) moving down a few notches. The biggest jumps were made by Taiwanese E-Ton Solar (#24 to #15) and Chinese Ningbo Solar (#30 to #14). Taken together, the top 15 firms comprised 65% of global production, almost the same as in 2008. As the industry matures and successful producers expand their capacity at a disproportionate rate, one would expect continuing consolidation over the long term. And if any further proof were needed for Chinese and Taiwanese dominance, a look at the names on this list will suffice: eight of the top 15 firms are based in that region. The list of top module producers in 2009 heavily overlaps those for cells, as the largest PV manufacturers produce both components. With Q-Cells, JA Solar and Motech (previously all pure-play cell producers) now entering the module production fray, this will continue to be the case in coming years. FiGuRe 3-1: toP 15 GlobAl cell PRoduceRS, 2009 (MW-dc) Source: GTM Research CoPYRiGHT 2010, GREEnTECH MEdiA inC All RiGHTS RESERvEd 2009 CEll And ModulE PRoduCTion 7
  • 8. GTM RESEARCH MAY 2010 FiGuRe 3-2: toP 15 GlobAl Module PRoduceRS, 2009 (MW-dc) Source: GTM Research CoPYRiGHT 2010, GREEnTECH MEdiA inC All RiGHTS RESERvEd 2009 CEll And ModulE PRoduCTion 8
  • 9. GTM RESEARCH MAY 2010 4 looking aHead: expeCt anotHer reCord breaking year, but More oversupply Our global supply-demand reconciliation reveals 2010 demand expanding significantly (by 59%) to 11.2 GW, largely due to a bumper first half in Germany and strong gains in Italy and the U.S. later in the year. Clearly, then, this seems to portend well for manufacturers, and bodes another record-breaking year for cell and module production. However, with the onset of feed-in tariff cuts in Germany in the middle of the year, we can expect a return to an oversupplied market through the back half of 2010 and 2011, although not nearly as severe as the situation that was witnessed in late 2008/early 2009. Our analysis indicates that 2010 will see another 6.9 GW of cell and 6.7 GW of module capacity being added – most of it in China, Taiwan, and Japan – bringing total global cell and module capacity to 25.1 GW and 22.7 GW, respectively. Much like 2009, therefore, one can expect heated competition between suppliers, further price drops (c-Si modules could be as cheap as $1.50 per watt by the end of the year), continuing cost pressure on less competitive producers, and a fresh wave of consolidation. It would not be at all surprising to see more producers closing up shop in Europe in favor of establishing Asian facilities (as Q-Cells and REC will be doing) or resorting to contract manufacturers (e.g., SunPower, Evergreen, and BP Solar) – all of which serves to reinforce the fact, unpleasant as it may be to many, that PV cells and modules are increasingly being viewed as fungible goods in this new solar reality. FiGuRe 4-1: GlobAl PV SuPPlY-deMANd iMbAlANce, 2007-2013e Source: GTM Research CoPYRiGHT 2010, GREEnTECH MEdiA inC All RiGHTS RESERvEd 2009 CEll And ModulE PRoduCTion 9
  • 10. GTM RESEARCH MAY 2010 reCent gtM researCH reports 2010 Global PV Demand Analysis and Forecast This report represents our latest annual comprehensive analysis of global PV demand. It examines the characteristics that led the global PV market to grow in 2009 despite the global financial crisis, and applies these lessons in order to forecast demand and market conditions through 2013. http://www.gtmresearch.com/report/2010-global-pv-demand- analysis-and-forecast Thin Film 2010: Market Outlook to 2015 This report assesses thin film’s impact on the global PV market by analyzing all relevant factors that influence demand for thin film, including technology and operational characteristics, module and BOS costs, capacity and production estimates, and in-depth profiles of over 60 of the top thin-film companies in the world. http://www.gtmresearch.com/report/the-united-states-pv-market- project-economics-policy-demand-and-strategy The United States PV Market: Project Economics, Policy, Demand, and Strategy Through 2013 This report will provide a comprehensive overview of PV demand, project development, and financing in the United States, including analysis and comparison of PV projects in the 16 largest state markets. (376 pages) http://www.gtmresearch.com/report/the-united-states-pv-market- project-economics-policy-demand-and-strategy CPV: New Applications and Emerging Markets This report, building on research conducted in 2008 by the Prometheus Institute and GTM Research, takes a freshly detailed look at the specific technologies, applications, policies, early adopters and economics of low-, medium-, and high-concentration CPV. (127 Pages) http://www.gtmresearch.com/report/cpv-technology-and-market- analysis-2009 A full array of GTM Research’s research reports is available at http://www.gtmresearch.com/. CoPYRiGHT 2010, GREEnTECH MEdiA inC All RiGHTS RESERvEd 2009 CEll And ModulE PRoduCTion 10
  • 11. GTM RESEARCH MAY 2010 upCoMing gtM researCH reports PV Technology, Production, and Cost, 2010 Forecast This authoritative report contains a comprehensive analysis of the PV supply chain. It provides detailed estimates and forecasts of PV cost structure, technical characteristics (efficiency, degradation), volumes (capacity and production) for all major components (wafers, cells, and modules) and all major technologies through 2013. Additionally, it details projected market share and selling prices by technology through the bottom-up construction of global supply and demand curves for PV, and profiles the leading 150 manufacturers in the PV space. Utility-owned PV Business Models Growth in the North American PV market is increasingly being driven by utility demand. New project announcements for utility-owned generation and utility power purchase agreements (PPAs) are arriving constantly, and utilities are becoming increasingly familiar with PV technologies as their renewable energy requirements ramp up. But the utility PV market remains in its infancy, and only a handful of projects were completed prior to 2010. This report will analyze the current state of the growing North American utility PV market and forecast its development. The report will include a comprehensive analysis of the utility PV project pipeline by location, developer, and technology, as well as profiles of project developers, utilities, and utility programs. Polysilicon: Supply, Demand, and Market Outlook Through 2013 This report will provide a comprehensive and data-rich analysis of the impact polysilicon will have on the solar market over the next half-decade. It will contain a detailed analysis of polysilicon cost structure, historical and projected capacity and production volumes, as well as detailed profiles of the leading polysilicon producers in the market. PV Inverter Market Outlook Through 2015 Rife with the potential for technological innovation and significant profits, the PV inverter space has assumed increasing importance and investment over the past year. This report provides an end-to-end analysis of the PV inverter market, with cost structure, production volume, and market share analysis for the leading vendors in the space. CoPYRiGHT 2010, GREEnTECH MEdiA inC All RiGHTS RESERvEd 2009 CEll And ModulE PRoduCTion 11
  • 12. GTM RESEARCH MAY 2010 GTM Research, a Greentech Media company, provides critical and timely market analysis in the form of concise and long-form market research reports, monthly newsletters and strategic consulting services. GTM Research’s analysis also underpins our webinars and live events. Our analyst team combines diverse backgrounds in the energy, environmental, emerging technology, investment banking, information technology and strategic consulting sectors. Complementing decades of real world experience, the staff holds advanced degrees in finance, engineering, public policy, law and environmental management. GTM Research is situated in the major global markets for greentech innovation worldwide, with offices in San Francisco, Boston, New York and Germany. www.gtmresearch.com Tate Ishimuro Shyam Mehta coNtAct Research Sales Senior Solar Analyst ishimuro@greentechmedia.com mehta@gtmresearch.com +1 415 777 9917 +1 718 384 5190 CoPYRiGHT 2010, GREEnTECH MEdiA inC All RiGHTS RESERvEd 2009 CEll And ModulE PRoduCTion 12