14 sam wilkinson - ims research

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14 sam wilkinson - ims research

  1. 1. Projections For Costs andPrices In the PV IndustrySam Wilkinson – PV Research Analyst – IMS Research The Solar Future: Belgium Wednesday 23rd March 2011
  2. 2. A Quick IntroductionSam Wilkinson PV Market Analyst, IMS Research Global Inquiring outlookWhat Does IMS Research Do? minds local Market research, business intelligence, knowledge consultancy and conferences Provide market data, forecasts, competitive Enabling Independent benchmarking unbiased sound 7 analysts focused on PV research decisions Offices in UK, USA, China, Korea & Japan Researching PV market for 4 years+ Clients include leading PV suppliersMore Information? www.PVMarketResearch.com www.IMSResearch.com
  3. 3. The PV Industry An Industry Which Currently Relies On Incentives An Industry Shaped By Incentives (and Politics) An Industry Whose Future Depends on Reducing Costs
  4. 4. Global PV Demand – Current OutlookLargest end-markets in 2010: Germany Italy Czech Republic 30 25 Asia 20 Installations (GW) Americas 15 EMEA 10 5 0 2006 2007 2008 2009 2010 2011 2012 2013
  5. 5. PV Module Supply – Current Outlook Capacity Increasing very quickly in 2010 Will continue increasing in 2011 and 2012 - faster than demand 60 50 Capacity - Annualised 40 ProductionGW 30 Installations 20 10 0 2009 2010 2011 2012 2013 2014
  6. 6. PV Module Shipments – Current Outlook 40 35 30 25 TotalShipments (GW) 20 15 10 5 0 2009 2010 2011 2012 2013 2014
  7. 7. PV Module Shipments – Current Outlook 40 35 30 Thin Film 25Shipments (GW) 20 c-Si 15 10 5 0 2009 2010 2011 2012 2013 2014
  8. 8. PV Module Prices – Short Term Many factors affecting short term trends in PV module prices Prices are generally decreasing over time 2,50 2,00 c-SiPrice per Watt ($/W) 1,50 1,00 0,50 0,00 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311
  9. 9. What Affects PV Module Costs?PV Module costs are a complicated mixture of costs and prices,including: Polysilicon Costs and Prices Ingot and Wafer Costs and Prices Cell Costs and Prices Module Costs and Prices Transport Costs Manufacturing Costs Taxes
  10. 10. Current Cost Structure Of A PV Module 2,00 Module and Wafer margins are 1,80 currently inflated 1,60 Many integrated cell and module Module 1,40 manufacturers. Therefore, making the cell margin look even lessPrice per Watt ($/W) 1,20 Cell 1,00 0,80 Wafer 0,60 0,40 0,20 Polysilicon 0,00 Costs Prices
  11. 11. Polysilicon Prices A small proportion of polysilicon is sold on the spot market Spot prices are volatile, particularly in times of high demand 120 100 Spot Price 80 Contract PricePrice per KG ($/kg) 60 40 20 0 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311
  12. 12. What Will Suppliers Do To Reduce Costs? Careful negotiation of supply contracts Increasing vertical integration By development, or acquisition, or partnerships? Research and development Increasing cell efficiencies Reducing material usage and wastage Improving manufacturing efficiencies Outsource production or move abroad Higher volume and economies of scale
  13. 13. c-Si v CdTe Costs Cadmium Telluride modules represent the majority of thin film market Lower material costs, high volume, automated production with less ‘product steps’ 1,60 1,40 1,20 c-Si CdTeCost per Watt ($/W) 1,00 0,80 0,60 0,40 0,20 0,00 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311
  14. 14. PV Module Prices – Long Term Outlook 2,50 2,00 Module Cell WaferPrice per Watt ($/W) 1,50 Polysilicon Thin Film 1,00 0,50 0,00 2009 2010 2011 2012 2013 2014
  15. 15. Average Inverter Prices 0,45 0,40 0,35Price per Watt ($/W) 0,30 0,25 0,20 0,15 0,10 0,05 0,00 2008 2009 2010 2011 2012 2013 2014What affects average PV inverter prices? Changes in product mix Trends towards certain regions or system types
  16. 16. Inverter Production CostsInverter production is very different to module production.How can inverter suppliers reduce costs? A shift towards larger inverters? Microinverters and power optimizers? Move production to low-cost labour regions?
  17. 17. Other System Costs? $ Modules $ Inverters $ Cables $ Connectors $ Frames $ Trackers $ Transformers $ Permit or application fees $ Grid connection costs $ Installation costs $ Service contracts $ Warranties and uptime guarantees $ System Cost
  18. 18. System Prices Average system prices to decline ~40 % by 2014. Decreases in module price are the largest contributor to system prices reducing 5,00 4,00 Other Inverters Modules Price per Watt ($/W) 3,00 2,00 1,00 0,00 2009 2010 2011 2012 2013 2014
  19. 19. Conclusions Incentive levels are declining and price reductions are essential throughout the industry System prices can fall sufficiently to maintain market growth System prices can reduce by 40% by 2014 All areas of the industry have potential to reduce costs Module prices have particularly good potential for cost reduction Any questions??Sam.WIlkinson@imsresearch.com www.pvmarketresearch.com

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